A-i^. 


California  Bank  Act 


1909 


COMPUMENTS  OF 
STATE  SUPERINTENDENT  OF  BANKS 


To  take  Effect  July  1,  1909 


5ACRAMENTO: 
.NNON  -  -  -  5UPLRINTLNDENT  5TATL  PRINTING 

1909 


California  Bank  Act 


PASSED  AT  THE, 


Thirty-eighth  Session  of  the  Legislature 


1909 


SACRAMENTO : 

W.  W.   SHANNON         -         -        -         SUPERINTENDENT  STATE  PRINTING 

1909. 


Digitized  by  the  Internet  Archive 

in  2007  with  funding  from 

IVIicrosoft  Corporation 


http://www.archive.org/details/bankactofstateofOOcalirich 


BANK  AQ  or  CALirORMA 


[Approved  March  1,  1909.] 


ARTICLE  I. 


GENERAL   PROVISIONS. 


Section  1.  This  act  shall  be  known  as  the  ''Bank  Act," 
and  shall  be  applicable  to  all  corporations  and  individuals 
specified  in  the  next  section. 

Sec.  2.  The  word  "bank"  as  used  in  this  act  includes  every 
person,  firm,  company,  copartnership  or  corporation  which  con- 
ducts the  business  of  receiving  money  on  deposit.  Banks  are 
divided  into  the  following  classes : 

(a)   Savings  banks; 

(6)   Commercial  banks ;  and 

(c)  Trust  companies. 

Sec.  3.  Corporations  may  be  formed  under  the  laws  of  this 
state  to  conduct,  as  provided  in  this  act,  and  not  otherwise,  any 
one  or  all  of  the  businesses  mentioned  in  divisions  a,  b  and  c  of 
section  2,  of  this  act. 

Sec.  4.  The  term  "savings  bank,"  when  used  in  this  act, 
means  a  bank  organized  for  the  purpose  of  accumulating  and 
loaning  the  funds  of  its  members,  stockholders,  and  depositors, 
and  which  may  loan  and  invest  the  funds  thereof,  receive 
deposits  of  money;  loan,  invest  and  collect  the  same  with 
interest;  and  may  repay  depositors  with  or  without  interest, 
and  having  power  to  invest  said  funds  in  such  property,  securi- 
ties and  obligations  as  may  be  prescribed  by  this  act;  and  to 
declare  and  pay  dividends  on  its  general  deposits,  and  a  stip- 
ulated rate  of  interest  on  deposits  made  for  a  stated  period  or 
upon  special  terms. 

Sec.  5.  The  term  "commercial  bank,"  when  used  in  this 
act,  means  any  bank  authorized  by  law  to  receive  deposits  of 
money,  deal  in  commercial  paper  or  to  make  loans  thereon, 
and  to  lend  money  on  real  or  personal  property,  and  to  discount 
bills,  notes,  or  other  commercial  paper,  and  to  buy  and  sell 
securities,  gold  and  silver  bullion,  or  foreign  coins  or  bills  of 
exchange. 

Sec.  6.  The  term  "trust  company,"  when  used  in  this  act, 
means  any  company  which  is  incorporated  for  the  purpose 
of  conducting  the  business  of  acting  as  executor,  administrator, 
guardian  of  estates,  assignee,  receiver,  depositary,  or  trustee. 


—  4  — 

Sec.  7.  No  foreign  corporation  shall  transact  a  banking 
business  in  this  state  without  first  complying  with  all  the 
requirements  of  the  laws  of  this  state  relative  to  banks  as 
defined  in  this  act,  and  without  having  the  capital  paid  up  in 
this  state  as  required  by  this  act.  And  no  such  foreign  corpo- 
ration shall  transact  any  banking  business  in  this  state  until  it 
has  executed  and  filed  with  the  superintendent  of  banks  a 
written  instrument  appointing  such  superintendent,  or  his  suc- 
cessor in  office,  its  true  and  lawful  attorney,  upon  whom  all 
process  in  any  action  or  proceeding  by  any  resident  of  the  state 
against  it  may  be  served,  with  the  same  effect  as  if  such  corpo- 
ration was  formed  under  the  laws  of  this  state  and  had  been 
lawfully  served  with  process  therein.  Service  in  favor  of  a 
resident  of  this  state  upon  such  attorney  shall  be  deemed 
personal  service  on  such  corporation.  The  superintendent  of 
banks  shall  forthwith  forward  by  mail  a  copy  of  every  process 
served  upon  him  under  the  provisions  of  this  section,  postage 
prepaid,  and  directed  to  the  secretary  of  such  corporation,  at 
its  last  known  post  office  address.  For  each  copy  of  process,  the 
superintendent  of  banks  shall  collect  the  sum  of  two  dollars, 
which  shall  be  paid  by  the  plaintiff  or  moving  party  at  the 
time  of  such  service,  to  be  recovered  by  him  as  part  of  his 
taxable  costs  if  he  succeed  in  the  suit  or  proceeding. 

Sec.  8.  Every  corporation,  at  the  time  it  applies  for  a 
certificate  to  do  a  banking  business,  must  file  with  the  superin- 
tendent of  banks  a  certified  copy  of  its  articles  of  incorporation, 
or  of  the  statute  chartering  such  corporation,  also  all  instru- 
ments amending  or  altering  such  articles  of  incorporation  or 
charter.  Thereafter  all  amendments  and  certificates  shall  like- 
wise be  so  filed  before  such  instruments  take  effect.  In  like 
manner  all  copartnerships  shall  file  certified  copies  of  their 
articles  of  copartnership  and  all  amendments  thereto. 

Sec.  9.  No  bank  in  this  state,  or  any  officer  or  director 
thereof,  shall  hereafter  open  or  keep  an  office  other  than  its 
principal  place  of  business,  without  first  having  obtained  the 
written  approval  of  the  superintendent  of  banks  to  the  opening 
of  such  branch  office,  which  written  approval  may  be  given  or 
withheld  in  his  discretion,  and  shall  not  be  given  by  him  until 
he  has  ascertained  to  his  satisfaction  that  the  public  convenience 
and  advantage  will  be  promoted  by  the  opening  of  such  branch 
office;  and,  provided  further,  that  no  bank  or  any  officer  or 
director  thereof,  shall  open  or  maintain  such  branch  unless  the 
capital  of  such  bank,  actually  paid  in  cash,  shall  exceed  the 
amount  required  by  this  act  by  the  sum  of  twenty-five  thousand 
dollars  for  each  branch  office  opened  and  maintained.  Every 
bank,  and  every  such  officer  or  director  violating  the  provisions 
of  this  section  shall  be  guilty  of  a  misdemeanor. 

Sec.  10.  No  person  shall  be  eligible  for  election  as  a  director- 
of  a  bank  unless  he  is  a  stockholder  of  the  bank,  owning,  in  his 


—  5  — 

own  right,  shares  thereof  of  the  actual  market  value  of  at  least 
five  hundred  dollars;  and  every  person  elected  to  be  director 
who,  after  such  election,  shall  cease  to  be  the  owner  in  his  own 
right  of  the  amount  of  stock  aforesaid,  shall  then  cease  to  be  a 
director  of  the  bank,  and  his  office  shall  then  become  vacant.  If 
a  bank  be  organized  without  capital  stock,  no  person  shall  be 
eligible  as  a  director  thereof  unless  he  is  both  a  member  and  a 
depositor  of  such  bank. 

Sec.  11.  Each  director  of  a  bank,  when  appointed  or  elected, 
shall  take  an  oath  that  he  will,  so  far  as  the  duty  devolves  on 
him,  diligently  and  honestly  administer  the  affairs  of  such  bank, 
and  will  not  knowingly  violate  or  willfully  permit  to  be  violated 
any  of  the  provisions  of  law  applicable  to  such  bank,  and  th^t  he 
is  the  owner  in  good  faith  and  in  his  own  right  of  the  shares  of 
stock  of  the  actual  market  value  required  by  section  10  of  this 
act,  subscribed  by  him  or  standing  in  his  name  on  the  books  of 
the  bank,  and  that  the  same  is  not  hypothecated  or  in  any  way 
pledged  as  security  for  any  loan  or  debt ;  and,  in  case  of  re-elec- 
tion or  re-appointment,  that  such  stock  was  not  hypothecated 
or  in  any  way  pledged  as  security  for  any  loan  or  debt  during 
his  previous  term.  Such  oath  shall  be  subscribed  by  the  director 
making  it,  and  certified  by  the  officer  before  whom  it  is  taken ; 
and  shall  be  immediately  transmitted  to  the  superintendent  of 
banks,  and  filed  and  preserved  in  his  office. 

Sec.  12.  No  person,  firm,  company,  copartnership  or  cor- 
poration not  subject  to  the  supervision  of  the  superintendent 
of  banks,  and  not  required  to  report  to  him  by  the  provisions 
of  this  act,  shall  make  use  of  any  office  sign,  at  the  place  where 
such  business  is  transacted,  having  thereon  any  artificial  or 
corporate  name,  or  other  words  indicating  that  such  place  or 
office  is  the  place  or  office  of  a  bank,  or  that  deposits  are  received 
there  or  payments  made  on  check,  or  any  other  form  of  banking 
business  transacted,  nor  shall  such  person  or  persons,  firm, 
company,  copartnership  or  corporation  make  use  of  or  circulate 
any  letterheads,  billheads,  blank  notes,  blank  receipts,  certifi- 
cates or  circulars,  or  any  written  or  printed,  or  partly  written 
and  partly  printed,  paper  whatever,  having  thereon  any  arti- 
ficial or  corporate  name  or  other  word  or  words  indicating  that 
such  business  is  the  business  of  a  bank,  savings  bank  or  trust 
company.  Every  person,  firm,  company,  copartnership  or 
officer  of  a  corporation  violating  the  provisions  of  this  section 
shall  be  guilty  of  a  misdemeanor. 

Sec.  13.  Every  person  or  number  of  persons,  not  being 
incorporated,  engaged  in  the  business  of  banking  or  publicly 
receiving  money  on  deposits,  must  conduct  such  business  under 
a  name  which  shows  the  true  name  of  all  persons  engaged 
therein,  unless  such  person  or  persons  have  complied  with  the 
provisions  of  article  7,  of  chapter  II,  of  title  10,  of  part  IV  of 
division  3  of  the  Civil  Code. 


Sec.  14.  No  bank,  or  any  officer  thereof,  shall  advertise  in 
any  manner,  or  publish  any  statement  of  the  capital  authorized 
or  subscribed,  unless  it  or  he  advertise  and  publish,  in  connec- 
tion therewith,  the  amount  of  capital  actually  paid  up.  Any 
bank,  or  any  officer  thereof,  advertising  in  any  manner,  or  pub- 
lishing any  statement  of  such  capital,  authorized  or  subscribed, 
without  a  statement  in  connection  therewith  of  the  capital 
actually  paid  up,  shall  be  guilty  of  a  misdemeanor. 

Sec.  15.  The  president  or  managing  officer  of  every  bank 
must,  within  fifteen  days  after  the  first  day  of  January  of  every 
odd  numbered  year,  return  to  the  superintendent  of  banks  a 
sworn  statement  showing  the  names  of  depositors  known  to  be 
dead,  or  who  have  not  made  further  deposits,  or  withdrawn  any 
moneys  during  the  preceding  ten  years.  Such  statements  shall 
show  the  amount  of  the  account,  the  depositor's  last  known 
place  of  residence  or  post  office  address,  and  the  fact  of  death, 
if  known  to  such  president  or  managing  officer.  Such  president 
or  managing  officer  must  give  notice  of  these  deposits  in  one  or 
more  newspapers  published  in  or  nearest  to  the  town  or  city 
where  such  bank  has  its  principal  place  of  business,  at  least 
once  a  week  for  four  consecutive  weeks,  the  cost  of  such  publi- 
cation to  be  paid  pro  rata  out  of  such  unclaimed  deposits.  This 
section  does  not  apply  to  any  deposit  made  by  or  in  the  name  of 
a  person  known  to  the  president  or  managing  officer  to  be  living, 
or  which,  with  the  accumulation  thereon,  is  less  than  fifty 
dollars.  The  superintendent  of  banks  must  incorporate  in  his 
subsequent  report  such  returns  made  to  him  as  provided  in  this 
section.  Any  president  or  managing  officer  of  any  bank  who 
neglects  or  refuses  to  make  the  sworn  statement  required  by  this 
section  shall  be  guilty  of  a  misdemeanor. 

Sec.  16.  When  any  deposit  with  a  bank  shall  be  made  by 
or  in  the  name  of  any  married  woman  or  minor,  the  same  shall 
be  held  for  the  exclusive  right  and  benefit  of  such  depositor, 
and  free  from  the  control  or  lien  of  all  other  persons,  except 
creditors,  and  shall  be  paid,  together  with  the  dividends,  if  any, 
and  interest,  if  any,  thereon  to  the  person  in  whose  name 
deposits  shall  have  been  made,  and  the  receipt  or  acquittance  of 
such  minor  shall  be  a  valid  and  sufficient  release  and  discharge 
for  such  deposit,  or  any  part  thereof,  to  the  bank.  When  any 
deposit  with  a  bank  shall  be  made  by  any  person  in  trust  for 
another,  and  no  other  or  further  notice  of  the  existence  and 
terms  of  a  legal  and  valid  trust  shall  have  been  given  in  writ- 
ing to  such  bank,  in  the  event  of  the  death  of  the  trustee,  the 
same  or  any  part  thereof,  together  with  the  dividends  or  inter- 
est, if  any,  thereon,  may  be  paid  to  the  person  for  whom  the 
deposit  was  made.  When  a  deposit  with  a  bank  shall  be  made 
by  any  person  in  the  names  of  such  depositor  and  another 
person  or  persons,  and  in  form  to  be  paid  to  either  or  the 
survivor  or  survivors  of  them,  such  deposit  thereupon,  and 


_  7  — 

any  additions  thereto  made  by  either  of  such  persons  upon  the 
making  thereof,  shall  become  the  property  of  such  persons  as 
joint  tenants,  and  the  same,  together  with  all  interest  thereon, 
shall  be  held  for  the  exclusive  use  of  the  persons  so  named, 
and  may  be  paid  to  either  during  the  lifetime  of  all  or  any  or 
to  the  survivor  or  survivors  after  the  death  of  one  or  more  of 
them,  and  such  payments  and  the  receipt  or  acquittance  of  the 
one  to  whom  such  payment  is  made  shall  be  a  valid  and  suffi- 
cient release  and  discharge  to  said  bank  for  all  payments  made 
on  account  of  such  deposit. 

The  surviving  husband  or  wife  of  any  deceased  person,  or,  if 
no  husband  or  wife  is  living,  then  the  children  of  such  dece- 
dent, and  if  no  children  are  living,  then  the  father  or  mother 
of  such  decedent,  may,  without  procuring  letters  of  adminis- 
tration, collect  of  any  bank  any  sum  which  said  deceased  may 
have  left  on  deposit  in  such  bank  at  the  time  of  his  or  her 
death;  provided,  such  deposit  shall  not  exceed  the  sum  of  five 
hundred  dollars.  Any  bank,  upon  receiving  an  affidavit  stat- 
ing that  said  depositor  is  dead,  and  that  affiant  is  the  surviving 
husband  or  wife,  as  the  case  may  be,  or  stating  that  decedent 
left  no  husband  or  wife,  and  that  affiant  is,  or  affiants  are,  the 
children,  or  the  father  or  mother,  of  said  decedent,  and  that 
the  whole  amount  that  decedent  left  on  deposit  in  any  and  all 
banks  of  deposit  in  this  state  does  not  exceed  the  sum  of  five 
hundred  dollars,  may  pay  to  said  affiant  or  affiants  any  deposit 
of  said  decedent,  if  the  same  does  not  exceed  the  sum  of  five 
hundred  dollars,  and  the  receipt  of  such  affiant  is  sufficient 
acquittance  therefor. 

Sec.  17.  Every  bank  now  in  existence  or  hereafter  organ- 
ized shall  keep  in  its  offices,  in  a  place  accessible  to  the  stock- 
holders, depositors,  and  creditors  thereof,  and  for  their  use,  a 
book  containing  a  list  of  stockholders  in  such  corporation,  and 
the  number  of  shares  of  stock  held  by  each;  and  every  such 
bank  shall  keep  posted  in  its  office,  in  a  conspicuous  place, 
accessible  to  the  public  generally,  a  notice  signed  by  the  presi- 
dent or  secretary,  showing : 

1.  The  names  of  the  directors  of  such  bank. 

2.  The  number  and  the  par  value  of  the  shares  of  stock  held 
by  each  director. 

The  entries  on  such  book  and  such  notice  shall  be  made  and 
posted  within  twenty-four  hours  after  any  transfer  of  stock, 
and  shall  be  prima  facie  evidence  against  each  director  and 
stockholder  of  the  number  of  shares  of  stock  held  by  each. 

Sec.  18.  Every  copartnership  doing  a  banking  business 
shall  keep  in  its  office,  in  a  place  accessible  to  the  partners  and 
depositors  and  the  creditors  thereof,  a  list  of  the  partners  and 
the  capital  paid  into  the  copartnership  of  each  partner. 

Sec.  19.  The  aggregate  of  paid  up  capital,  together  with 
the  surplus,  of  every  bank,  must  equal  ten  per  centum  of  its 


—  8  — 

deposit  liabilities ;  such  deposit  liabilities  shall  not  be  increased 
when  such  proportion  of  paid-up  capital  and  surplus  is  want- 
ing, and  in  no  event  shall  said  paid  up  capital  be  less  than 
the  minimum  paid  up  capital  provided  by  this  act.  Andy  pro- 
vided also,  that  no  savings  bank  shall  be  required  to  have  a 
paid  up  capital  and  surplus  of  more  than  one  million  dollars 
or  if  organized  without  a  capital  stock,  a  reserve  fund  of  more 
than  one  million  dollars. 

Sec.  20.  Every  bank,  other  than  a  savings  bank,  shall  at  all 
times  have  on  hand,  in  lawful  money  of  the  United  States, 
gold  and  silver  coin,  gold  certificates  or  silver  certificates,  an 
amount  equal  to  fifteen  per  centum  of  the  aggregate  amount  of 
its  deposits,  exclusive  of  state,  county  and  municipal  deposits. 
The  amount  thus  to  be  kept  on  hand  shall  be  called  its  lawful 
money,  reserve.  Three  fifths  of  such  lawful  money  reserve  of 
any  bank  other  than  a  savings  bank  may  consist  of  moneys  on 
deposit  subject  to  call  with  any  bank  or  banks  other  than  a 
savings  bank  in  this  state ;  provided,  that  every  bank  receiving 
deposits  of  other  banks  shall  maintain  as  a  lawful  money 
reserve  at  least  twenty  per  centum  of  the  aggregate  amount  of 
its  deposits,  exclusive  of  state,  county  and  municipal  deposits. 
If  the  lawful  money  reserve  of  any  bank  shall  be  less  than  the 
amount  required  by  this  section,  such  bank  shall  not  increase 
its  liability  by  making  any  new  loans  or  discounts,  otherwise 
than  by  discounting  bills  of  exchange  payable  on  sight,  or  mak- 
ing any  dividends  from  profits  until  the  full  amount  of  its  law- 
ful money  reserve  has  been  restored.  The  superintendent  of 
banks  may  notify  any  bank,  whose  lawful  money  reserve  shall 
be  below  the  amount  herein  required,  to  make  good  such 
reserve ;  and,  if  it  shall  fail  for  thirty  days  thereafter  to  make 
good  such  reserve,  such  bank  shall  be  deemed  insolvent  and 
may  be  proceeded  against  under  the  provisions  of  this  act. 

Sec.  21.  The  directors  of  banks  having  a  capital  stock  may, 
at  such  times  and  in  such  manner  as  the  by-laws  prescribe, 
declare  and  pay  dividends  to  depositors  and  stockholders  of 
so  much  of  the  profits  of  the  bank,  and  of  the  interest  arising 
from  the  capital  and  deposits,  as  may  be  appropriated  for  that 
purpose  under  the  by-laws  or  under  their  agreements  with 
depositors,  but  every  such  bank  shall,  before  the  declaration  of 
such  dividend,  carry  at  least  one  tenth  (1-10)  part  of  the  net 
profits  of  the  stockholders  for  the  preceding  half  year  to  its 
surplus  or  reserve  fund  until  the  same  shall  amount  to  twenty- 
five  per  centum  of  its  paid-up  capital  stock.  But  the  whole  or 
any  part  of  such  surplus  or  reserve  fund,  if  held  as  the  exclu- 
sive property  of  stockholders,  may  at  any  time  be  converted 
into  paid-up  capital  stock,  in  which  event  such  surplus  or 
reserve  fund  shall  be  restored  in  manner  as  above  provided 
until  it  amounts  to  twenty-five  per  centum  of  the  aggregate 
paid-up  capital  stock.    A  larger  surplus  or  reserve  fund  may 


—  9  — 

be  created,  and  nothing  herein  contained  shall  be  construed  as 
prohibitory  thereof.  The  capital  and  the  assets  of  the  bank 
are  a  security  to  depositors  and  stockholders,  depositors  having 
the  priority  of  security  over  the  stockholders,  but  the  by-laws 
may  provide  that  the  same  security  shall  extend  to  deposits 
made  by  stockholders. 

Sec.  22.  Any  corporation  authorized  by  its  articles  of  incor- 
poration so  to  do,  may  combine  the  business  of  a  commercial 
bank  and  savings  bank  and  trust  company,  or  any  or  all  of 
them. 

Sec.  23.  Every  bank  doing  a  department  business,  shall 
have  paid  up  in  cash  a  capital  stock  of  not  less  than  twenty-five 
thousand  dollars  if  it  transacts  both  a  commercial  and  savings 
business ;  and  paid  up  in  cash  a  capital  stock  of  not  less  than 
two  hundred  twenty-five  thousand  dollars  if  it  transacts  both  a 
commercial  and  trust  business;  and  paid  up  in  cash  a  capital 
stock  of  not  less  than  two  hundred  twenty-five  thousand  dollars 
if  it  transacts  both  a  savings  and  trust  business;  and  paid  up 
in  cash  a  capital  stock  of  not  less  than  two  hundred  twenty- 
five  thousand  dollars  if  it  transacts  a  commercial,  savings  and 
trust  business.  Such  capital  stock  shall  be  increased  from  time 
to  time  in  the  same  manner  and  to  the  same  extent  as  provided 
for  in  section  nineteen  of  this  act. 

Sec.  24.  Every  bank,  before  it  commences  to  do  business 
or  before  it  opens  a  new  department  and  commences  to  trans- 
act business  in  or  under  such  new  department,  shall  obtain  the 
certificate  of  the  superintendent  of  banks  for  the  opening  of 
each  of  the  departments  specified.  Each  certificate  herein 
provided  for  shall  be  given  when  the  superintendent  shall,  by 
the  examination  required  by  this  act,  have  satisfied  himself 
that  the  proper  amount  of  cash  has  been  paid  in  as  capital 
and  the  provisions  of  this  act  complied  with.  The  applicant 
shall  pay  for  such  certificate  a  fee  of  fifty  dollars. 

Sec.  25.  Every  bank  shall  maintain  for  each  department 
a  lawful  money  reserve  equal  in  amount  to  that  required  by 
this  act  for  the  respective  business  conducted,  and  shall  keep 
separate  and  distinct  the  lawful  money  reserve  of  any  depart- 
ment from  that  of  any  other  department;  and  all  deposits 
made  with  other  banks,  whether  temporary  or  otherwise,  shall 
be  assets  of  the  respective  departments  by  which  they  were 
made,  and  shall  be  so  carried  on  the  books  of  such  other  banks, 
and  shall  be  repaid  only  upon  the  order  of  the  department  to 
whose  credit  they  stand. 

No  department  shall  receive  deposits  of  any  other  depart- 
ment of  the  same  corporation ;  provided,  Jiowever,  that  any 
bank  having  departments  shall  have  the  right  to  sell  and 
transfer  any  bonds,  securities  or  loans  from  one  department 
to  another  upon  receipt  of  the  actual  value  thereof,  if  such 
bonds,  securities  or  loans  are  a  legal  investment  for  the  depart- 
ment purchasing  the  same  under  the  provisions  of  this  act. 


—  10  — 

Sec.  26.  Every  bank  having  different  departments  shall 
keep  separate  books  of  account  for  each  department  of  its 
business,  and  shall  be  governed  as  to  all  deposits,  reserves, 
investments  and  transactions  relating  to  each  department  by 
the  provisions  in  this  act  specifically  provided  for  the  respec- 
tive kind  of  business. 

It  shall  keep  all  investments  relating  to  the  savings  depart- 
ment entirely  separate  and  apart  from  the  investments  of  its 
other  department  or  departments. 

Every  bank  shall  conduct  the  business  of  all  its  departments 
in  one  building,  or  in  adjoining  buildings,  and  shall  keep 
entirely  separate  and  apart  in  each  department  the  cash,  secu- 
rities and  property  belonging  to  such  department,  and  shall 
not  mingle  the  cash,  securities  and  property  of  one  department 
with  that  of  another. 

Sec.  27.  All  money  belonging  to  each  department,  whether 
cash  on  hand  or  with  other  banks,  and  the  investments  made, 
shall  be  held  solely  for  the  repayment  of  the  depositors  in 
said  department,  until  all  depositors  of  such  department  shall 
have  been  paid,  and  the  overplus  then  remaining  shall  be 
applied  to  the  other  liabilities  of  such  bank. 

Sec.  28.  Every  individual,  firm  or  corporation  doing  a 
banking  business  in  this  state  must,  on  all  its  window-signs 
and  in  advertising,  and  on  letterheads  and  other  stationery  on 
which  its  business  is  transacted,  use  the  word  ** savings"  if  it 
conducts  a  savings  business,  or  the  word  "trust"  if  it  conducts 
a  trust  department,  and  the  word  ''commercial"  if  it  conducts 
a  commercial  department. 

Sec.  29.  Every  corporation  heretofore  created  under  the 
laws  of  this  state,  doing  a  banking  business  therein,  and  which 
has  no  capital  stock,  may  elect  to  have  a  capital  stock,  and 
may  issue  certificates  of  stock  therefor,  in  the  same  manner 
as  corporations  formed  under  the  provisions  of  part  IV,  title 
I,  chapter  I,  article  I,  of  the  Civil  Code,  relating  to  the  forma- 
tion of  corporations;  provided,  that  no  such  corporation  shall 
use  or  convert  any  moneys  or  funds  theretofore  belonging  to  it, 
or  under  its  control,  into  capital  stock;  but  such  funds  or 
moneys  must  be  held  and  managed  only  for  the  purposes  and  in 
the  manner  for  which  they  were  created.  Before  such  change  is 
made,  a  majority  of  the  members  of  such  corporation  present 
at  a  meeting  called  for  the  purpose  of  considering  the  proposi- 
tion whether  it  is  best  to  have  a  capital  stock,  its  amount,  and 
the  number  of  shares  into  which  it  shall  be  divided,  must  vote 
in  favor  of  having  a  capital  stock,  fix  the  amount  thereof, 
and  the  number  of  shares  into  which  it  shall  be  divided. 
Notice  of  the  time  and  place  of  holding  such  meeting,  and 
its  object,  must  be  given  by  the  president  of  such  corporation 
by  mailing  notice  of  such  meeting  to  each  member  of  such 
corporation  at  his  last  known  post  office  address  at  least  ten 


—  11  — 

days  prior  to  the  day  fixed  for  such  meeting,  and  by  publica- 
tion in  some  newspaper  printed  and  published  in  the  county, 
or  city  and  county,  in  which  the  principal  place  of  business 
of  the  corporation  is  situated,  at  least  once  a  week  for  three 
successive  weeks  prior  to  the  holding  of  the  meeting.  A  copy 
of  the  proceedings  of  this  meeting,  giving  the  number  of  per- 
sons present,  the  votes  taken,  the  notice  calling  the  meeting, 
the  proof  of  its  publication,  the  amount  of  capital  actually 
subscribed,  and  by  whom,  all  duly  certified  by  the  president 
and  secretary  of  the  corporation,  must  be  filed  in  the  office  of 
the  secretary  of  state  and  clerk  of  the  county  where  the  arti- 
cles of  incorporation  are  filed.  Thereafter  such  corporation 
is  possessed  of  all  the  rights  and  powers,  and  is  subject  to  all 
the  obligations,  restrictions,  and  limitations,  as  if  it  had  been 
originally  created  with  a  capital  stock. 

Sec.  30.  Any  bank  may  conduct  a  safe  deposit  department, 
but  shall  not  invest  more  than  one  tenth  of  its  capital  and  sur- 
plus in  such  safe  deposit  department. 

Sec.  31.  Any  bank  may  sell  the  whole  or  any  portion  of  its 
assets  to  any  other  bank  which  may  purchase  its  assets  after 
obtaining  the  consent  of  the  stockholders  of  the  selling  and 
of  the  purchasing  bank  holding  of  record  at  least  two  thirds 
of  the  issued  capital  stock  of  each  of  such  corporations;  such 
consent  to  be  expressed  either  in  writing  excQuted  and  acknowl- 
edged by  such  stockholders  and  attached  to  the  instrument  of 
sale,  or  to  a  copy  thereof,  or  by  vote  at  a  stockholders'  meeting 
of  such  banks  called  for  that  purpose. 

The  selling  and  purchasing  banks  may  for  such  purposes 
enter  into  an  agreement  of  sale  and  purchase,  which  agreement 
shall  contain  all  the  terms  and  conditions  connected  with  the 
sale  and  purchase  of  its  assets. 

Such  agreement  shall  contain  proper  provision  for  the  pay- 
ment of  liabilities  of  the  selling  bank,  and  in  this  particular 
shall  be  subject  to  the  approval  of  the  superintendent  of  banks ; 
and  shall  not  be  valid  until  such  approval  is  obtained.  Such 
agreement  may  contain  provisions  for  the  transfer  of  all 
deposits  to  the  purchasing  bank,  subject,  however,  to  the  right 
of  every  depositor  of  the  selling  bank  to  withdraw  his  deposit 
in  full  on  demand  after  such  transfer,  irrespective  of  the  terms 
under  which  it  was  deposited  with  the  selling  bank. 

Sec.  32.  Any  bank  receiving  trust  funds  in  accordance 
with  the  provisions  of  this  act  relating  to  trust  companies  must 
not  mingle  such  trust  funds  with  the  other  assets  of  the  cor- 
poration, and  such  funds  shall  not  be  carried  or  counted  as 
any  part  of  the  lawful  reserve  provided  for  in  this  act.  The 
officers  of  any  bank  who  knowingly  violate  or  consent  to  the 
violation  of  this  provision  shall  be  guilty  of  a  felony. 

Sec.  33.     No  officer  or  employee  of  any  bank  shall,  directly 


—  12  — 

or  indirectly,  for  himself  or  as  the  partner  or  agent  of  others, 
borrow  any  of  the  deposits  or  other  funds  of  such  bank,  nor 
shall  he  nor  any  director  become  an  endorser  or  surety  for 
loans  to  others  nor  in  any  manner  be  obligor  for  moneys  bor- 
rowed or  loaned  by  such  bank.  The  office  of  any  officer  or 
employee  who  acts  in  contravention  of  the  provisions  of  this 
section  shall  immediately  become  vacant,  and  he  shall  be  guilty 
of  a  misdemeanor. 

Sec.  34.  No  bank  shall  purchase  or  invest  its  capital  or 
money  of  its  depositors,  or  any  part  of  either,  in  the  shares  of 
its  own  capital  stock;  nor  loan  its  capital  or  the  money  of 
its  depositors,  or  any  part  of  either,  on  the  shares  of  its  own 
capital  stock,  unless  such  purchase  or  loan  shall  be  necessary 
to  jfrevent  loss  on  debts  previously  contracted  in  good  faith. 

Stock  thus  purchased  or  carried  shall,  within  six  months 
from  the  time  of  its  purchase,  be  sold  or  disposed  of  at  public 
or  private  sale. 

The  officers  of  any  bank  who  knowingly  violate  or  consent 
to  the  violation  of  this  provision  shall  be  guilty  of  a  felony. 

Sec.  35.  No  director,  or  officer,  or  employee,  or  controlling 
stockholder  of  any  bank  shall,  directly  or  indirectly,  for  him- 
self or  as  the  partner  or  agent  of  others,  sell  or  transfer,  or 
cause  to  be  sold  or  transferred  to  the  bank  of  which  he  is  a 
director,  officer,  employee,  or  controlling  stockholder,  any  mort- 
gage on  real  estate  or  contract  arising  from  the  sale  of  real 
estate  made  by  any  corporation  or  syndicate  in  which  such 
director  or  officer,  or  employee,  or  controlling  stockholder  is 
personally  or  financially  interested,  without  the  consent  in 
writing  of  the  superintendent  of  banks. 

Any  director,  or  officer,  or  employee,  or  controlling  stock- 
holder of  any  bank  who  knowingly  violates  or  consents  to  the 
violation  of  this  provision  shall  be  deemed  guilty  of  a  felony. 

Sec.  36.  No  bank  receiving  deposits  of  money  shall  pur- 
chase, agree  to  purchase,  underwrite  or  guarantee  any  bond 
issue  in  excess  of  five  per  centum  of  its  assets,  except  bonds 
of  the  United  States,  of  the  State  of  California,  of  the  cities, 
cities  and  counties,  counties  or  school  districts  of  this  state. 

Sec.  37.  No  bank  shall  purchase,  or  invest  its  capital  or 
money  of  its  depositors,  or  any  part  of  either,  in  shares  of 
corporations,  unless  such  purchase  shall  be  necessary  to  prevent 
loss  on  debts  previously  contracted  in  good  faith,  and  stock  thus 
purchased  or  carried  shall,  within  six  months  from  the  time 
of  its  purchase,  be  sold  or  disposed  of  at  public  or  private 
sale,  unless  permission  to  hold  said  stock  for  a  longer  period 
shall  be  obtained  from  the  superintendent  of  banks. 

The  officers  of  any  bank  who  knowingly  violate  or  consent 
to  the  violation  of  this  provision  shall  be  deemed  guilty  of  a 
felony. 


—  13  — 

Sec.  38.  A  director,  officer,  agent  or  employee  of  any  bank 
who, 

First — Knowingly  receives  or  possesses  himself  of  any  of 
its  property  otherwise  than  in  payment  for  a  just  demand, 
and  with  intent  to  defraud,  omits  to  make  or  to  cause  or  direct 
to  be  made  a  full  and  true  entry  thereof  in  its  books  and 
accounts ;  or. 

Second — Concurs  in  omitting  to  make  any  material  entry 
thereof ;  or. 

Third — Knowingly  concurs  in  making  or  publishing  any 
written  report,  exhibit  or  statement  of  its  affairs  or  pecuniary 
condition  containing  any  material  statement  which  is  false ;  or. 

Fourth — Having  the  custody  or  control  of  its  books,  will- 
fully refuses  or  neglects  to  make  any  proper  entry  in  the  books 
of  such  corporation  as  required  by  law,  or  to  exhibit  or  allow 
the  same  to  be  inspected  and  extracts  to  be  taken  therefrom 
by  the  superintendent  of  banks,  his  chief  deputy  or  any  of  his 
examiners,  shall  be  guilty  of  a  felony. 

Sec.  39.  Any  officer,  director,  agent,  teller,  clerk  or  em- 
ployee of  any  bank  who  either, 

First — Knowingly  overdraws  his  account  with  such  bank, 
and  thereby  obtains  the  money,  notes  or  funds  of  any  such 
bank;  and, 

Second — Asks  or  receives  or  consents  or  agrees  to  receive  any 
commissions,  emolument,  gratuity  or  reward,  or  any  money, 
property  or  thing  of  value  or  of  personal  advantage,  for  pro- 
curing or  endeavoring  to  procure  for  any  person,  firm  or  cor- 
poration any  loan  from,  or  the  purchase  or  discount  of  any 
paper,  note,  draft,  check  or  bill  of  exchange,  by  such  bank,  or 
for  permitting  any  person,  firm  or  corporation  to  overdraw  any 
account  with  such  bank,  is  guilty  of  a  felony. 

Sec.  40.  No  bank  mentioned  in  this  act  shall  make  any 
contract  with  any  of  its  depositors  whereby  the  stockholders' 
liability  provided  for  by  the  constitution  of  this  state  is  in 
any  manner  waived,  and  if  any  such  contract  shall  be  so  made, 
such  contract  shall  be  void. 

Sec.  41.  No  director,  officer,  agent,  or  servant  of  any  bank 
shall,  directly  or  indirectly,  for  his  own  personal  benefit,  pur- 
chase or  be  interested  in  the  purchase  of  any  of  the  obligations 
of  said  bank  for  a  less  sum  than  shall  appear  upon  the  face 
thereof. 

Sec.  42.  No  director,  officer,  agent,  or  servant  of  any  bank 
shall,  directly  or  indirectly,  for  his  own  personal  benefit,  pur- 
chase or  be  interested  in  the  purchase  of  any  of  the  assets  of 
said  bank,  for  a  less  sum  than  the  current  market  value  thereof. 
Every  person  violating  the  provisions  of  this  subdivision  shall 
be  guilty  of  a  misdemeanor. 

Sec.  43.  No  bank  shall  deposit  any  of  its  funds  with  any 
other  bank,  unless  such  other  bank  has  been  designated  as  a 


—  14  — 

depositary  for  its  funds  by  the  vote  of  a  majority  of  the 
directors  or  trustees  of  the  bank  making  the  deposits,  exclusive 
of  the  vote  of  any  director  or  trustee  who  is  an  officer,  director 
or  trustee  of  the  depositary  so  designated. 

Sec.  44.  No  bank  shall  hereafter  make  a  loan  secured  by 
the  stock  of  another  bank,  if  by  making  such  loan  the  total 
stock  of  such  other  bank  held  by  such  loaning  bank  as  col- 
lateral will  exceed  in  the  aggregate  ten  per  centum  of  the 
capital  stock  of  such  other  bank;  provided  that  no  loan  upon 
the  capital  stock  of  any  bank  shall  be  made  unless  such  bank 
has  been  in  existence  for  two  or  more  years  and  has  earned 
and  paid  a  dividend  upon  its  capital  stock. 

Sec.  45.  Interest  unpaid,  although  due  or  accrued,  on  debts 
owing  to  any  bank,  shall  not  be  included  in  calculation  of  its 
profits  previous  to  a  dividend. 

Sec.  46.  No  bank  shall  invest  or  loan  more  than  five  per 
centum  of  its  assets  in  any  one  bond  issue,  except  bonds  of 
the  United  States,  of  the  State  of  California,  of  the  counties, 
cities  and  counties,  cities  or  school  districts  of  this  state. 

Sec.  47.  No  bank  shall  make  any  loan  on  real  estate  except 
it  be  a  first  lien,  but  this  provision  shall  not  prevent  the  accept- 
ance of  a  second  lien  to  secure  the  payment  of  a  debt  previously 
contracted  in  good  faith. 

Sec.  48.  Any  national  bank  of  this  state  receiving  the 
deposits  of  banks  organized  and  conducting  business  under 
this  act,  must,  at  the  request  of  the  superintendent  of  banks, 
submit  to  an  examination  by  him,  or  his  duly  appointed  exam- 
iners, should  the  superintendent  of  banks  in  his  discretion 
deem  it  necessary  or  desirable  that  such  examination  be  made ; 
and  the  expense  of  such  examination  shall  be  paid  by  such 
national  bank;  and  if  any  such  national  bank  shall  refuse  to 
permit  such  examination  to  be  made  by  the  superintendent 
of  banks,  then  the  superintendent  of  banks  shall  notify  in  writ- 
ing any  and  all  banks  depositing  its  funds  with  such  national 
bank,  to  withdraw  its  deposits  therefrom,  and  such  bank  shall 
comply  with  such  order,  and  failure  so  to  do  shall  be  a  misde- 
meanor. 

Sec.  49.  It  shall  not  be  lawful  for  any  commercial  bank, 
individual  banker,  trust  company,  association,  firm,  stock  com- 
pany, or  corporation,  to  advertise  or  put  forth  a  sign  as  a 
savings  bank,  either  directly  or  indirectly,  or  in  any  way  to 
solicit  or  receive  deposits  as  a  savings  bank,  except  in  the  case 
of  savings  banks  or  banks  having  a  savings  department,  sub- 
ject to  the  provisions  of  this  act. 

Sec.  50.  Every  bank  shall  post  in  a  conspicuous  place  in  its 
banking  room  the  last  certificate  obtained  from  the  superin- 
tendent of  banks,  as  provided  for  in  section  127  of  this  act. 
Every  bank  that  fails  to  comply  with  the  provisions  of  this 
section  is  guilty  of  a  misdemeanor. 


—  15  — 

Sec.  51.  Any  court  having  appointed  and  having  juris- 
diction of  any  executor,  administrator,  guardian,  assignee, 
receiver,  depositary  or  trustee,  upon  the  application  of  such 
executor,  administrator,  guardian,  assignee,  receiver,  deposi- 
tary or  trustee,  or  upon  the  application  of  any  person  having 
an  interest  in  the  estate  administered  upon  by  such  officer  or 
trustee,  after  notice  to  other  parties  in  interest  as  the  court  may 
direct,  and  after  a  hearing  upon  such  application,  may  author- 
ize such  officer  or  trustee  to  deposit  any  money  then  in  his 
hands  as  such  officer  or  trustee  or  which  may  thereafter  come 
into  his  hands,  and  until  the  further  order  of  the  court,  in 
any  bank  organized  under  the  laws  of  the  State  of  California ; 
and  upon  such  deposit  being  made,  the  officer  or  trustee  so 
depositing  the  same  shall  thereafter  and  while  such  moneys 
remain  on  deposit  in  such  bank,  be  relieved  and  discharged 
from  all  liability  and  responsibility  therefor,  and  the  bond 
required  of  such  officer  or  trustee  given  upon  his  appointment 
shall  be  thereupon  by  said  court  reduced  to  such  an  amount 
as  the  court  may  deem  reasonable ;  such  deposit  shall  be  repaid 
only  upon  the  orders  of  said  court,  and  shall  be  a  preferred 
claim  against  such  bank  and  be  paid  in  full  before  any  other 
depositor  of  such  bank  shall  have  been  paid. 


ARTICLE  II. 

SAVINGS  BANKS. 

Sec.  60.  Every  savings  bank  must  have  actually  paid  in  a 
capital  stock  of  not  less  than  twenty-five  thousand  dollars,  or, 
if  organized  without  capital  stock,  a  reserve  fund  of  at  least  one 
million  dollars  and  until  said  sum  of  twenty-five  thousand 
dollars  or  said  sum  of  one  million  dollars  shall  be  actually  paid 
in,  the  superintendent  of  banks  shall  refuse  to  issue  the  cer- 
tificate required  by  this  act ;  provided  that  nothing  herein  shall 
be  construed  to  affect  the  provisions  of  section  twenty-three  of 
this  act  relative  to  the  capital  stock  required  of  banks  doing  a 
departmental  business. 

Sec.  61.  Savings  banks  may  purchase,  hold  and  convey  real 
and  personal  property  as  follows : 

1.  The  lot  and  building  in  which  the  business  of  the  bank 
is  carried  on ;  such  lot  and  building  shall  not  cost  the  savings 
bank  an  amount  exceeding  its  capital  and  surplus;  and  the 
authority  of  a  two-thirds  vote  of  a  full  board  of  directors  shall 
be  necessary  to  authorize  the  purchase  or  construction  thereof. 

2.  Such  as  may  have  been  mortgaged,  pledged,  or  conveyed 
to  it  in  trust  for  its  benefit  in  good  faith,  for  money  loaned  in 
pursuance  of  the  regular  business  of  the  corporation. 

3.  Such  as  may  have  been  purchased  at  sales  under  pledges, 


—  16  — 

mortgages  or  deeds  of  trust  made  for  its  benefit  for  money  so 
loaned,  and  such  as  may  be  conveyed  to  it  by  borrowers  in  satis- 
faction and  discharge  of  loans  made  thereon. 

No  savings  bank  shall  purchase,  hold,  or  convey  real  estate 
in  any  other  case  or  for  any  other  purpose ;  and  all  -real  estate 
described  in  subdivision  3  of  this  section  must  be  sold  by  the 
bank  within  ten  years  after  the  title  thereto  is  vested  in  it  by 
purchase  or  otherwise,  unless  permission  to  hold  said  real  estate 
for  a  longer  period  be  given  by  the  superintendent  of  banks  in 
writing.  Parcels  of  real  estate  not  sold  within  ten  years,  or 
extension  of  said  period  as  above  provided,  may  be  purchased 
by  any  persons  or  parties  wanting  them,  at  the  price  to  be 
determined  by  arbitration  of  three  persons  appointed  by  the 
superior  court  as  appraisers,  at  the  request  of  the  would-be 
purchaser. 

No  savings  bank  shall  purchase,  own,  or  sell  personal  prop- 
erty, except  such  as  may  be  requisite  for  its  immediate  accom- 
modation for  the  convenient  transaction  of  its  business,'  and 
mortgages  on  real  estate,  bonds,  securities  or  evidences  of 
indebtedness,  public  or  private,  gold  and  silver  bullion  and 
United  States  mint  certificates  of  ascertained  value,  and  evi- 
dences of  debt  issued  by  the  United  States. 

No  savings  bank  shall  purchase,  hold  or  convey  bonds,  securi- 
ties or  evidences  of  indebtedness,  public  or  private,  except  as 
follows : 

(a)  Bonds  or  interest-bearing  notes  or  obligations  of  the 
United  States,  or  those  for  which  the  faith  of  the  United  States 
is  pledged  for  the  payment  of  interest  and  principal. 

(6)  Bonds  of  this  state. 

(c)  Bonds  of  any  state  in  the  United  States  that  have  not, 
within  five  years  previous  to  making  such  investment  by  such 
bank,  defaulted  in  the  payment  of  any  part  of  either  principal 
or  interest  thereof. 

(d)  Bonds  of  any  city,  county,  city  and  county,  town,  town- 
ship or  school  district  of  this  state. 

(e)  Bonds  of  any  city,  town  or  county  which  has  in  each 
case,  at  the  time  of  the  investment,  more  than  twenty  thousand 
inhabitants,  as  ascertained  by  the  United  States  or  state  census 
made  next  preceding  such  investment,  in  any  of  the  states  of 
the  United  States,  other  than  in  the  State  of  California,  issued 
pursuant  to  the  authority  of  any  law  of  such  states ;  provided, 
the  entire  bonded  indebtedness  of  such  city  or  county  or  town 
shall  not  exceed  five  per  centum  of  the  assessed  value  of  the 
taxable  property  therein,  including  the  issue  of  bonds  in  which 
said  investment  is  made  as  shown  by  the  last  assessment  pre- 
ceding the  investment;  and  provided  further,  that  such  city, 
town  or  county  or  state  in  which  it  is  situated  has  not  defaulted 
in  the  payment  of  any  part  of  either  principal  or  interest 
thereon  within  five  years  previous  to  making  such  investment. 


—  17  — 

(/)  First  mortgage  or  underlying  bonds  of  any  steam  rail- 
way, the  income  of  which  is  sufficient  to  pay  all  operating 
expenses  and  fixed  charges,  and  which  is  completed  and  oper- 
ated, wholly  or  in  part,  in  any  of  the  states  of  the  United 
States. 

(g)  Bonds  of  street  railroads,  water,  light,  light  and  power, 
gas,  and  other  public  utility  and  industrial  corporations.  All 
bonds  authorized  for  investment  by  this  section  shall  be  secured 
by  a  jnortgage  or  trust  deed,  which  is,  at  the  time  of  making 
such  investment,  (1)  a  first  or  underlying  mortgage  or  trust 
deed  of  the  corporation  issuing  said  bonds,  or  (2)  a  refunding 
mortgage  or  trust  deed  used  to  retire  all  prior  lien  mortgage 
debts  of  said  corporation  outstanding  at  the  time  of  making 
said  investment ;  provided,  that  the  income  of  such  corporation 
is  sufficient  to  pay  all  operating  expenses  and  fixed  charges 
and  such  income  shall  have  been  so  sufficient  for  the  term  of 
three  years  preceding  the  issuance  of  such  bonds,  or  that  pay- 
ment of  its  said  bonds  have  been  guaranteed  by  a  corporation 
that  has  paid  all  its  operating  expenses  and  fixed  charges  for  a 
period  of  three  years  prior  to  guaranteeing  the  payment  of 
such  bonds. 

(h)  First  mortgage  bonds  or  deeds  of  trust  issued  by  real 
estate  corporations ;  provided,  that  said  bond  issue  shall  not 
exceed  sixty  per  centum  of  the  market  value  of  the  real  estate 
taken  as  security. 

No  savings  bank  shall  purchase  the  bonds  of  any  corporation 
or  make  a  loan  on  the  bonds  of  any  corporation,  if  the  franchise 
of  such  corporation  expires  prior  to  the  maturity  of  its  bonds, 
or  if  the  franchise  or  special  privilege  granted  to  such  corpora- 
tion by  any  city,  county,  or  city  and  county,  expires  before  the 
maturity  of  such  bond  issue. 

Sec.  62.  No  savings  bank  shall,  directly  or  indirectly,  deal 
or  trade  in  real  or  personal  property  in  any  other  case  or  for 
any  other  purpose  than  is  authorized  by  this  act,  and  shall  not 
contract  any  debt  or  liability  for  any  purpose  whatever  other 
than  for  deposits,  except  as  in  this  section  provided. 

Savings  banks  may  pay  regular  depositors,  when  requested 
by  them,  by  draft  upon  deposits  to  the  credit  with  their  banks, 
and  charge  current  rate  of  exchange  for  such  drafts. 

No  savings  bank  shall  borrow  money,  or  pledge  or  hypothe- 
cate any  of  its  securities,  except  to  meet  the  immediate  demands 
of  its  own  depositors,  and  then  only  in  pursuance  of  a  resolu- 
tion adopted  by  a  vote  of  a  majority  of  its  board  of  directors, 
duly  entered  upon  their  minutes,  wherein  shall  be  recorded  the 
ayes  and  nays  upon  each  vote;  also  with  the  written  approval 
of  the  superintendent  of  banks,  and  he  shall  have  the  authority 
to  fix  the  amount  to  be  borrowed,  and  the  term  and  rate  of 

2— BA 


—  18  — . 

interest  thereon;  provided,  however,  that  savings  banks  may, 
in  the  manner  authorized  by  law,  and  without  the  written 
approval  of  the  superintendent  of  banks,  borrow  the  public 
moneys  of  the  state,  counties,  cities  and  counties,  and  towns 
and  receive  such  public  moneys  on  deposit. 

Sec.  63.  Savings  banks  may  issue  general  certificates  of 
deposit,  which  are  transferable,  as  in  other  cases,  by  indorse- 
ment and  delivery ;  may  issue,  when  requested  by  the  depositor, 
special  certificates,  acknowledging  the  deposit  by  the  person 
therein  named  of  a  specified  sum  of  money,  and  expressly  pro- 
viding on  the  face  of  such  certificate  that  the  sum  so  deposited 
and  therein  named  may  be  transferred  only  on  the  books  of  the 
bank ;  payment  thereafter  made  by  the  bank  to  the  depositor 
named  in  such  certificate,  or  to  his  assignee  named  upon  the 
books  of  the  bank,  or  in  case  of  death,  to  the  legal  representa- 
tive of  such  person,  of  the  sum  for  which  such  special  certificate 
was  issued,  shall  discharge  the  bank  from  all  further  liability 
on  account  of  the  money  so  paid. 

All  time  certificates  of  deposit,  issued  by  a  savings  bank, 
shall  be  subject  to  the  same  limitations  and  conditions  as 
applied  to  other  deposits,  and  notice  thereof  shall  be  given 
by  the  words  ' '  Subject  to  conditions  of  agreement  with  depos- 
itors" printed  on  the  face  of  the  certificate  issued. 

Sec.  64.  Savings  banks  may  prescribe  by  their  by-laws,  or 
by  contract  with  depositors,  the  time  and  conditions  on  which 
repayment  is  to  be  made  to  depositors,  except  as  in  this  act 
otherwise  prohibited ;  but  whenever  there  is  any  call  by  depos- 
itors for  repayment  of  a  greater  amount  than  the  bank  may 
have  disposable  for  that  purpose,  the  directors  or  officers  thereof 
must  not  make  any  new  loans  or  investments  of  the  funds  of 
the  depositors,  or  of  earnings  thereof,  until  such  excess  of  .call 
has  ceased.  The  directors  of  any  such  bank,  having  no  capital 
stock,  must  retain,  on  each  dividend  day,  at  least  ten  per 
centum  of  the  net  profits  of  the  bank,  to  constitute  a  reserve 
fund,  which  must  be  invested  in  the  same  manner  as  other 
funds  of  the  bank,  and  must  be  used  toward  paying  any  losses 
which  the  bank  may  sustain  in  pursuing  its  lawful  business. 
The  bank  may  provide  by  its  by-laws  for  the  disposal  of  any 
excess  in  the  reserve  fund,  as  provided  for  in  section  21  of  this 
act,  and  the  final  disposal,  upon  the  dissolution  of  the  bank,  of 
the  reserve  fund,  or  of  the  remainder  thereof,  after  payment  of 
losses. 

Sec.  65.  No  director,  or  officer  of  any  savings  bank  must, 
directly  or  indirectly,  for  himself  or  as  the  partner  or  agent 
of  others,  borrow  any  of  the  deposits  or  other  funds  of  such 
bank,  nor  must  he  become  an  endorser  or  surety  for  loans  to 
others,  nor  in  any  manner  be  obligor  for  moneys  borrowed  of 
or  loaned  by  such  bank.     The  office  of  any  director  or  officer 


—  19  — 

who  acts  in  contravention  of  the  provisions  of  this  section 
immediately  thereupon  becomes  vacant,  and  every  director  or 
officer  authorizing  or  consenting  to  such  loan,  and  the  person 
who  receives  such  loan,  shall  severally  be  guilty  of  a  misde- 
meanor. 

Sec.  66.  Receiving  deposits,  issuing  certificates  of  deposit, 
checks,  and  bills  of  exchange,  and  the  like,  in  the  transaction 
of  the  business  of  savings  banks,  must  not  be  construed  to  be 
the  creation  of  debt  within  the  meaning  of  the  phrase  "create 
debt ' '  in  section  three  hundred  and  nine  of  the  Civil  Code  and 
as  provided  for  in  this  act. 

Sec.  67.  1.  No  savings  bank  shall  loan  money  except  on 
adequate  security  of  real  or  personal  property,  and  no  such 
loan  shall  be  made  for  a  period,  longer  than  ten  years ;  pro- 
vided that  no  loans  shall  be  made  on  unsecured  notes. 

2.  No  savings  bank  shall  invest  or  loan  more  than  five  per 
centum  of  its  assets  on  any  one  bond  issue,  except  bonds  of 
the  United  States,  of  the  State  of  California,  of  the  counties, 
cities  and  counties,  cities  or  school  districts  of  this  state. 

3.  No  savings  bank  shall  loan  money  to  exceed  ninety  per 
centum  of  the  market  value  of  bonds  specified  in  subdivisions 
(a),  (&),  (c)  and  (d)  of  subdivision  three  of  section  sixty-one 
of  this  act,  and  no  more  than  eighty-five  per  centum  of  the  mar- 
ket value  of  bonds  specified  in  subdivision  (e)  of  subdivision 
three  of  section  sixty-one  of  this  act,  and  no  more  than  seventy- 
five  per  centum  of  the  market  value  of  bonds  specified  in  sub- 
divisions (/*)  and  (g)  of  subdivision  three  of  section  sixty-one 
of  this  act,  and  no  more  than  sixty-five  per  centum  of  the  mar- 
ket value  of  personal  property  and  stocks  of  corporations  or 
banks ;  provided,  however,  that  no  loan  shall  be  made  upon  the 
capital  stock  of  any  corporation  or  bank  unless  such  corporation 
or  bank  has  been  in  existence  for  two  or  more  years  and  has 
earned  and  paid  a  dividend  on  its  capital  stock. 

4.  No  savings  bank  shall  make  any  loan  on  the  security  of 
real  estate  except  it  be  a  first  lien  and  in  no  event  to  exceed 
sixty  per  centum  of  the  market  value  of  any  piece  of  real  estate 
to  be  taken  as  security,  except  for  the  purpose  of  facilitating 
the  sale  of  property  owned  by  the  savings  bank ;  provided,  that 
a  second  lien  may  be  accepted  to  secure  the  repayment  of  a  debt 
previously  contracted  in  good  faith. 

5.  No  savings  bank  shall  purchase,  invest  or  loan  its  capital 
or  the  money  of  its  depositors,  or  any  part  of  either,  in  mining 
shares  or  stock. 

6.  No  savings  bank  shall  hereafter  make  a  loan  secured  by 
the  stock  of  another  bank,  if  by  making  such  loan  the  total 
stock  of  such  other  bank  held  by  such  loaning  bank  as  collateral 
will  exceed  in  the  aggregate  ten  per  centum  of  the  capital 
stock  of  such  other  bank. 

Any  president  or  managing  officer  who  knowingly  consents 


—  20  — 

to  a  violation  of  the  above  provisions  shall  be  deemed  guilty 
of  a  felony. 

Sec.  68.  Savings  banks  must  carry  in  cash,  or  its  equiva- 
lent, an  amount  equal  to  four  per  centum  of  its  deposit  liabili- 
ties, of  which  two  per  centum  of  such  liabilities  shall  be  in  coin 
or  currency  of  standard  value  in  its  own  keeping.  The  amount 
thus  carried  shall  be  called  the  lawful  money  reserve. 

No  new  loans  shall  be  made  during  any  deficiency  in  the 
lawful  money  reserve. 

Deposits  with  commercial  banks  and  trust  companies,  on 
open  account,  to  facilitate  business  transactions,  as  provided 
in  this  section,  shall  be  permitted,  and  shall  not  be  construed 
as  loans. 

Not  more  than  five  per  centum  of  the  deposits  of  any  sav- 
ings bank  shall  be  deposited  with  any  one  bank. 

Sec.  69.  Every  savings  bank,  and  the  business  of  every 
savings  department  of  every  other  bank,  must  be  conducted 
under  and  in  accordance  with  the  provisions  of  this  act. 

ARTICLE  III. 

COMMERCIAL  BANKS. 

Sec.  80.  No  commercial  bank  shall  make  any  loans  to  any 
person,  company,  corporation  or  firm  to  an  amount  exceeding 
one  tenth  part  of  the  capital  stock  of  such  bank  actually  paid 
in  and  surplus;  provided,  however,  that  a  bank  may  loan  to 
any  person,  company,  corporation  or  firm  a  sum  not  exceed- 
ing twenty-five  per  centum  of  its  capital  stock  actually  paid 
in  and  surplus  upon  security  worth  at  least  fifteen  per  centum 
more  than  the  amount  of  its  loans ;  or  it  may  loan  ten  per 
centum  of  such  capital  and  surplus  as  first  above  provided, 
and  a  further  sum  not  exceeding  fifteen  per  centum  of  such 
capital  and  suplus  upon  security  worth  at  least  fifteen  per 
centum  more  than  the  amount  of  such  loan  so  secured;  except 
that  a  commercial  bank  may  buy  from,  or  discount,  for  any 
person,  company,  corporation  or  firm,  or  loan  upon  bills  of 
lading,  warehouse  receipts  and  bills  of  exchange,  drawn  in 
good  faith  against  actual  existing  value  or  against  commercial 
or  business  paper  actually  owned  by  the  person  negotiating 
the  same. 

Sec.  81.  No  loan  shall  be  made  by  any  commercial  bank 
upon  the  securities  of  one  or  more  corporations,  the  payment 
of  which  is  undertaken,  in  whole  or  in  part,  severally,  but  not 
jointly,  by  two  or  more  individuals,  firms,  or  corporations : 

(a)  If  the  borrowers  or  underwriters  be  obligated  abso- 
lutely or  contingently  to  purchase  the  securities,  or  any  of 
them,  collateral  to  such  loan,  unless  the  borrowers  or  under- 
writers shall  have  paid  on  account  of  the  purchase  of  such 


—  21  — 

securities  an  amount  in  cash,  or  its  equivalent,  equal  to  at 
least  twenty-five  per  centum  of  the  several  amounts  for  which 
they  remain  obligated  in  completing  the  purchase  of  such 
securities ; 

(6)  If  the  commercial  bank  making  such  loan  be  liable, 
directly  or  indirectly,  or  contingently,  for  the  repayment  of 
such  loan  or  any  part  thereof ; 

(c)  If  its  term,  including  any  renewal  thereof  by  agree- 
ment, express  or  implied,  exceed  the  period  of  one  year ; 

(d)  Or  to  an  amount  under  any  circumstances  in  excess  of 
twenty-five  per  centum  of  the  capital  and  surplus  of  the  com- 
mercial bank  making  such  loan. 

Sec.  82.  Every  commercial  bank  which  is  now  transacting, 
or  which  may  hereafter  transact  business,  shall  have  actually 
paid  in  a  capital  stock  of  not  less  than  twenty-five  thousand 
dollars;  and  until  said  sum  of  twenty-five  thousand  dollars 
shall  be  actually  paid  in,  the  superintendent  of  banks  shall 
not  issue  the  certificate  required  by  section  twenty-four  of  this 
act;  provided  that  nothing  herein  shall  be  construed  to  aifect 
the  provisions  of  section  twenty-three  of  this  act  relative  to  the 
capital  stock  required  of  banks  doing  a  departmental  business. 

Sec.  83.  No  commercial  bank  shall  loan  any  of  its  funds 
to  any  of  its  directors  unless  such  loan  shall  first  have  been 
approved  by  a  two-thirds  vote  of  its  board  of  directors,  on 
which  vote  the  borrowing  director  shall  not  participate,  and 
the  fact  of  making  such  loan,  the  name  of  the  director  borrow- 
ing the  same,  the  time  when  the  same  shall  become  due,  the 
rate  of  interest  thereon,  and  the  amount,  value,  and  character 
of  the  security  pledged  therefor,  if  any,  shall  be  forthwith 
forwarded  by  the  cashier  of  such  bank  to  the  superintendent 
of  banks ;  and  if  the  superintendent  of  banks  shall  disapprove 
of  such  loan,  he  shall  immediately  notify  such  bank  of  his  dis- 
approval thereof,  and  such  bank  shall  forthwith  collect  such 
loan ;  provided,  however,  that  the  total  loans  to  all  directors  of 
such  bank  shall  not  at  any  one  time  exceed  thirty  per  cent  of 
the  capital  and  surplus  of  such  bank;  and  provided,  further) 
that  each  bank  having  any  loan  or  loans  outstanding  to  any 
of  its  directors  shall  once  each  month  report  in  writing  to  the 
superintendent  of  banks  the  name  of  each  director  to  whom 
such  loan  is  made,  the  amount  of  such  loan,  the  rate  of  interest 
thereon,  the  time  when  the  same  shall  fall  due,  and  the  security 
pledged  therefor,  if  any.  Any  officer  or  director  of  any  com- 
mercial bank  violating  any  of  the  provisions  of  this  section 
shall  be  guilty  of  a  felony. 


22 


ARTICLE  IV. 

TRUST  COMPANIES. 

Sec.  90.  Any  corporation  which  has  been  or  shall  be  incor- 
porated under  the  general  incorporation  laws  of  this  state, 
authorized  by  its  articles  of  incorporation  to  act  as  executor, 
administrator,  guardian,  assignee,  receiver,  depositary  or  trus- 
tee, and  having  a  capital  of  not  less  than  two  hundred  thousand 
dollars  actually  paid  in,  in  cash,  may  be  appointed  to  act  in 
such  capacity  in  like  manner  as  individuals  and  shall  be  known 
as  a  trust  company.  In  all  cases  in  which  it  is  required  that 
an  executor,  administrator,  guardian,  assignee,  receiver,  depos- 
itary or  trustee,  shall  qualify  by  taking  and  subscribing  an 
oath,  or  in  which  an  affidavit  is  required,  it  shall  be  a  sufficient 
qualification  by  such  corporation  if  such  oath  shall  be  taken 
and  subscribed  or  such  affidavit  made  by  the  president  or 
secretary  or  manager  or  trust  officer  thereof,  and  such  officer 
shall  be  liable  for  the  failure  of  such  trust  company  to  perform 
any  of  the  duties  required  by  law  to  be  performed  by  indi- 
viduals acting  in  like  capacity  and  subject  to  like  penalties; 
and  such  trust  company  shall  be  liable  for  such  failure  to  the 
full  amount  of  its  capital  stock;  provided,  any  such  appoint- 
ment as  guardian  shall  apply  to  the  .estate  only,  and  not  to 
the  person.  Such  trust  company  shall  be  entitled  to  and  shall 
be  allowed  proper  compensation  for  all  the  services  performed 
by  them  under  the  foregoing  provisions  of  this  act;  but  such 
compensation  shall  not  exceed  that  allowed  to. natural  persons 
for  like  services. 

Sec.  91.  Any  court,  having  appointed  and  having  juris- 
diction of  any  executor,  administrator,  guardian,  assignee, 
receiver,  depositary,  or  trustee,  upon  the  application  of  such 
officer  or  trustee,  or  upon  the  application  of  any  person  having 
an  interest  in  the  estate  administered  by  such  officer  or  trustee, 
after  notice  to  the  other  parties  in  interest  as  the  court  may 
direct,  and  after  a  hearing  upon  such  application,  may  author- 
ize such  officer  or  trustee  to  deposit  any  moneys  then  in  his 
hands,  or  which  may  come  into  his  hands  thereafter,  and  until 
the  further  order  of  said  court,  with  any  such  trust  company ; 
and  upon  deposit  of  such  money,  and  its  receipt  and  acceptance 
by  such  trust  company,  the  said  officer  or  trustee  shall  be 
discharged  from  further  care  or  responsibility  therefor.  Such 
deposits  shall  be  paid  out  only  upon  the  orders  of  said  court. 

Sec.  92.  It  shall  be  lawful  for  any  public  administrator  to 
deposit  with  any  trust  company  having  not  less  than  two 
hundred  thousand  dollars  paid-up  capital,  doing  business  in 
the  county,  or  city  and  county,  in  which  he  is  acting  as  such 
administrator,  any  and  all  moneys  of  any  estate  upon  which 


—  23  — 

he  is  administering,  not  required  for  the  current  expenses  of 
the  administration;  provided  that  such  corporation  deposit 
with  the  state  treasurer  the  securities  required  by  this  act. 
Such  deposits  shall  relieve  the  public  administrator  from  depos- 
iting with  the  county  treasurer  the  moneys  so  deposited  with 
such  corporation.  Moneys  so  deposited  by  a  public  adminis- 
trator may  be  drawn,  upon  the  order  of  such  administrator, 
countersigned  by  a  judge  of  a  superior  court,  when  required 
for  the  purpose  of  administration,  or  otherwise. 

Sec.  93.  Whenever,  in  the  judgment  of  any  court  having 
jurisdiction  of  any  estate  in  process  of  administration  by  any 
executor,  administrator,  guardian,  assignee,  receiver,  deposi- 
tary, or  trustee,  and  after  such  notice  to  the  parties  in  interest 
as  the  court  shall  direct,  and  after  a  hearing  on  such  applica- 
tion, the  said  court  may  order  the  said  officer  or  trustee  to 
deposit  with  any  such  trust  company,  for  safe-keeping,  such 
portion  or  all  of  the  personal  assets  of  said  estate  as  it  shall 
deem  proper;  and  thereupon  said  court  shall,  by  an  order  of 
record,  reduce  the  bond  to  be  given  or  theretofore  given  by 
such  officer  or  trustee,  so  as  to  cover  only  the  estate  remaining 
in  the  hands  of  said  officer  or  trustee;  and  the  property  as 
deposited  shall  thereupon  be  held  by  such  trust  company, 
under  the  orders  and  directions  of  said  court.  Any  court 
having  jurisdiction  of  an  estate  being  administered  by  a  public 
administrator,  may  direct  such  public  administrator  to  deposit 
all  or  any  part  of  the  moneys  of  the  estate  not  required  for  the 
current  expenses  of  the  administration,  with  any  such  trust 
company  doing  business  in  the  county,  or  city  and  county, 
where  such  public  administrator  is  acting. 

Sec.  94.  Such  trust  company  shall  not  be  required  to  give 
any  bond  or  security  in  case  of  any  appointment  hereinbefore 
provided  for,  except  as  hereinafter  provided,  but  shall  be 
responsible  for  all  investments  which  shall  be  made  by  it  of 
the  funds  which  may  be  entrusted  to  it  for  investment  by  such 
court,  and  shall  be  liable  as  natural  persons  in  like  positions 
now  are,  and  as  hereinafter  provided. 

Sec.  95.  Such  trust  company  shall  pay  interest  upon  all 
moneys  held  by  it  as  trustee,  by  virtue  of  this  act,  at  such  rate 
as  may  be  agreed  upon  at  the  time  of  its  acceptance  of  any 
such  appointment,  or  as  shall  be  provided  by  the  order  of  the 
court. 

Sec.  96.  Each  trust  company,  before  accepting  any  such 
appointment  or  deposit,  shall  deposit  with  the  treasurer  of 
state,  for  the  benefit  of  the  creditors  of  said  trust  company, 
the  sum  of  one  hundred  thousand  dollars  ($100,000),  in  bonds 
of  the  United  States,  or  municipal  bonds  of  this  state,  or'  of 
any  county,  or  city,  city  and  county,  or  school  district  thereof, 
or  in  mortgages  on  improved  and  productive  real  estate  in  this 
state,  being  first  liens  thereon,  and  the  real  estate  being  worth 


—  24  — 

at  least  twice  the  amount  loaned  thereon ;  said  bonds  or  mort- 
gages to  be  approved  by  the  superintendent  of  banks.  The 
bonds  and  securities  so  deposited  may  be  exchanged  from  time 
to  time  for  other  securities,  receivable  as  aforesaid.  Said  bonds 
of  the  United  States,  or  municipal  bonds  of  this  state,  or  of 
any  county,  city,  city  and  county,  or  school  district  thereof, 
to  be  registered  in  the  name  of  said  treasurer,  officially,  and 
all  said  securities  to  be  subject  to  sale  and  transfer,  and  to  the 
disposal  of  the  proceeds  by  said  treasurer,  only  on  the  order 
of  a  court  of  competent  jurisdiction  and  as  hereinafter  pro- 
vided. The  state  shall  be  responsible  for  the  safe  return  of 
such  securities  deposited  with  the  treasurer  of  the  state  under 
this  section. 

Sec.  97.  Any  such  trust  company,  having  a  paid-up  capital 
in  excess  of  two  hundred  thousand  dollars,  may  be  permitted 
by  the  superintendent  of  banks  to  mortgage  any  improved 
and  productive  real  estate  owned  by  it,  in  excess  of  said 
amount,  to  the  treasurer  of  state,  for  such  sum  as  the  said 
superintendent  of  banks  may  determine,  and  such  mortgage 
may  be  deposited  with  said  treasurer,  and  when  so  deposited 
it  shall  be  included  in  the  amount  of  securities  hereinabove 
required  to  be  deposited  with  said  treasurer  for  the  benefit  of 
the  creditors  of  said  trust  company. 

Sec.  98.  So  long  as  the  trust  company  so  depositing  shall 
continue  solvent,  it  shall  be  permitted  to  receive  from  said 
treasurer  the  interest  or  dividends  on  said  deposits,  and  when- 
ever any  trust  company  receives  trust  funds  as  such  trustee 
in  excess  of  five  hundred  thousand  dollars,  it  shall  deposit 
with  the  state  treasurer  securities  mentioned  in  section  96  of 
this  act,  to  be  approved  by  the  superintendent  of  banks,  in 
the  amount  of  another  one  hundred  thousand  dollars,  and  for 
each  five  hundred  thousand  dollars  of  such  trust  funds  there- 
after received,  an  additional  deposit  of  fifty  thousand  dollars 
of  such  securities  likewise  approved  shall  be  made  with  the 
said  state  treasurer ;  provided,  however,  that  no  trust  company 
shall  be  required  to  deposit  more  than  one  million  dollars  of 
such  securities. 

The  state  shall  be  responsible  for  the  safe  return  of  such 
securities  deposited  with  the  treasurer  of  the  state  under  this 
section. 

Sec.  99.  When  any  part  of  such  deposit  with  the  state 
treasurer  is  made  in  bonds  and  mortgages,  it  shall  be  accom- 
panied by  full  abstracts  of  titles  and  searches,  or  by  certificates 
of  title  issued  by  a  person,  company  or  corporation,  whose 
business  or  objects  are  to  make  searches  of  titles  and  issue 
certificates  of  titles,  and  which  said  person,  company  or  cor- 
poration shall  be  one  designated  or  approved  by  said  super- 
intendent of  banks,  and  shall  be  examined  and  approved  by 
or  under  the  direction  of  the  said  superintendent  of  banks. 


—  25  — 

The  fees  for  an  examination  of  title  by  counsel  to  be  paid  by 
the  trust  company  making  the  deposit,  shall  not  exceed  twenty 
dollars  for  each  mortgage,  and  the  fee  for  each  appraiser,  not 
exceeding  two,  besides  expenses,  shall  be  five  dollars  for  each 
mortgage. 

Sec.  100.  Before  the  superintendent  of  banks  issues  his 
certificate  to  any  trust  company,  there  must  be  filed  in  his 
office  the  affidavit  of  a  majority  of  its  board  of  directors  or 
the  persons  named  in  said  articles  as  the  first  directors  of  the 
corporation  that  at  least  two  hundred  thousand  dollars  of  the 
capital  stock  has  actually  been  subscribed  and  paid  in  to  a 
person  named  in  such  affidavit  for  the  benefit  of  the  corpo- 
ration. 

Sec.  101.  On  making  the  report  required  by  the  terms  of 
this  act,  every  trust  company  shall,  in  addition  to  the  other 
facts  to  be  reported  on,  furnish  a  list  and  brief  description  of 
the  trusts  held  by  such  corporation,  the  source  of  the  appoint- 
ment thereto,  and  the  amount  of  real  and  personal  estate  held 
by  such  trust  company  by  virtue  thereof;  except  that  mere 
mortgage  trusts,  wherein  no  action  has  been  taken  by  such 
corporation,  shall  not  be  included  in  such  statement. 

Sec.  102.  Any  trust  company  which  desires  to  retire  from 
business  under  this  act,  shall  furnish  to  the  superintendent  of 
banks  satisfactory  evidence  of  its  release  and  discharge  from 
all  the  obligations  and  trusts  hereinbefore  provided  for ;  where- 
upon he  shall  revoke  his  certificate  to  such  trust  company,  and 
thereupon  the  treasurer  of  state  shall  return  to  said  trust 
company  all  its  securities. 

Sec.  103.  Except  as  herein  otherwise  provided,  any  trust 
company  exercising  the  powers  and  performing  the  duties 
provided  for  in  this  act,  shall  keep  inviolate  all  communica- 
tions confidentially  made  to  it  touching  the  existence,  condition, 
management  and  administration  of  any  trusts  confided  to  it; 
and  no  creditor  or  stockholder  of  any  such  trust  company  shall 
be  entitled  to  disclosure  of  any  such  communication ;  provided, 
however,  that  the  president,  manager  and  secretary  of  such 
trust  company  shall  be  entitled  to  knowledge  of  such  communi- 
cation ;  and  provided,  further,  that  in  any  suit  or  proceeding 
touching  the  existence,  condition,  management  or  administra- 
tion of  such  trust,  the  court  wherein  the  same  is  pending  may 
require  disclosure  of  any  such  communication. 

Sec.  104.  The  use  of  the  word  '* trust'*  in  combination  with 
or  in  connection  with  the  word  ** company,"  "corporation," 
** incorporation, "  ** association,"  "society,"  "organization," 
or  "syndicate,"  is  hereby  prohibited  to  all  persons,  firms, 
associations,  companies  or  corporations  other  than  corporations 
provided  for  by  this  act.  Every  person,  firm,  association, 
company,  or  corporation  which  uses  the  word  "trust"  in  com- 
bination with  or  in  connection  with  the  word  "company," 


—  26  — 

''corporation,"  ** incorporation, "  "association,"  ** society," 
"organization,"  or  "syndicate,"  as  the  name  nnder  which 
business  is  done  or  transacted,  shall  be  subject  to  the  provisions 
of  this  act  and  to  the  supervision  of  the  superintendent  of 
banks.  Any  person,  firm,  association,  company,  or  corporation 
making  use  of  the  word  "trust"  in  combination  or  in  connec- 
tion with  the  word  "company,"  "corporation,"  "incorpora- 
tion," "association,"  "society,"  "organization,"  or  "syndi- 
cate," in  the  manner  hereinabove  mentioned,  in  the  transac- 
tion of  business,  and  not  subject  to  the  provisions  of  this  act 
and  the  supervision  of  the  superintendent  of  banks,  shall  be 
guilty  of  a  misdemeanor. 

No  corporation  hereafter  formed  shall  use  the  word  "trust" 
or  "trustee"  as  a  part  of  its  corporate  name  unless  it  shall  be 
authorized  by  its  articles  of  incorporation  to  act  as  executor, 
administrator,  guardian,  assignee,  receiver,  depositary  or  trus- 
tee; nor  shall  any  corporation  hereafter  formed  accept  or 
execute  any  trust  mentioned  in  this  act,  unless  it  shall  have 
complied  with  the  provisions  of  this  act. 

Sec.  105.  Every  trust  company  shall  invest  its  capital  and 
trust  funds  received  by  it  in  accordance  with  the  laws  relative 
to  the  investment  of  funds  deposited  with  savings  banks,  unless 
a  specific  agreement  to  the  contrary  is  made  between  the  trust 
company  and  the  party  creating  the  trust. 

Sec.  106.  Every  trust  company  desiring  to  do  or  doing  a 
commercial  banking  business  or  a  savings  bank  business,  or 
both,  in  addition  to  its  trust  business,  shall  have  paid  up  in 
cash  the  capital  as  provided  in  section  twenty-three  of  this 
act.  Such  capital  for  each  such  department  shall  be  increased 
from  time  to  time  in  the  same  manner  and  to  the  same  extent 
as  though  such  bank  were  conducting  separate  banks  instead 
of  separate  departments. 

Every  trust  company  doing  a  departmental  business  shall 
comply  with  the  provisions  of  this  act  governing  each  of  such 
departments  as  to  its  deposits,  reserves,  investments  and  loans. 

ARTICLE  V. 

STATE  BANKING  DEPARTMENT. 

Sec.  120.  There  is  hereby  created  a  state  banking  depart- 
ment. The  chief  officer  of  such  department  shall  be  the  super- 
intendent thereof,  and  be  known  as  the  superintendent  of 
banks.  He  shall  be  appointed  by  the  governor,  and  shall  hold 
his  office  for  a  term  of  four  years,  or  until  his  successor  shall 
have  been  appointed  and  qualified.  No  person  shall  be 
appointed  superintendent  of  banks  who  has  not  had  active 
banking  experience,  either  as  executive  officer  or  director  of 
some  commercial  bank,  savings  bank  or  trust  company,  at  least 


—  27  — 

one  half  of  which  experience  has  been  had  in  this  state.  He 
shall  not,  either  directly  or  indirectly,  be  interested  in  any 
commercial  bank,  savings  bank  or  trust  company,  or  as  an 
individual  banker.  He  shall  receive  an  annual  salary  of  ten 
thousand  dollars,  to  be  paid  monthly  out  of  the  state  treasury 
on  a  warrant  of  the  controller.  He  shall,  within  fifteen  days 
from  the  time  of  notice  of  his  appointment,  take  and  subscribe 
to  the  constitutional  oath  of  office,  and  file  the  same  in  the  office 
of  the  secretary  of  state,  and  execute  to  the  people  of  the  state 
a  bond  in  the  penal  sum  of  fifty  thousand  dollars,  with  corpo- 
rate surety  or  two  or  more  sureties  to  be  approved  by  the 
governor  of  the  state,  conditioned  for  the  faithful  discharge  of 
the  duties  of  his  office. 

Sec.  121.  The  superintendent  of  banks  shall  employ  a  chief 
deputy,  attorney  and  such  clerks  and  examiners  as  he  may 
need  to  discharge  in  a  proper  manner  the  duties  imposed  upon 
him  by  law,  none  of  which  examiners  or  clerks  or  attorney 
shall  be  interested  in  any  bank  in  this  state  as  director,  stock- 
holder, officer  or  employee;  they  shall  perform  such  duties  as 
he  shall  assign  to  them.  He  shall  fix  the  compensation  of  the 
attorney,  clerks,  and  examiners,  which  compensation  shall  be 
paid  monthly,  on  his  certificate  and  on  the  warrant  of  the 
controller,  out  of  the  state  treasury.  The  chief  deputy  shall, 
within  fifteen  days  from  the  time  of  his  appointment,  take  and 
subscribe  to  the  constitutional  oath  of  office,  and  file  the  same 
in  the  office  of  the  secretary  of  state,  and  his  compensation 
shall  be  four  thousand  dollars  per  annum ;  provided,  however, 
that  the  total  expenditure  provided  for  in  this  act  shall  not 
exceed  seventy-five  thousand  dollars  per  annum. 

No  person  shall  be  appointed  a  chief  deputy  who  has  not  had 
at  least  three  years'  active  banking  experience,  either  as  an 
executive  officer  or  employee  of  some  bank  in  this  state.  In 
case  of  the  absence  or  inability  to  act,  or  vacancy  in  the  office 
of  superintendent  of  banks  for  thirty  consecutive  days,  the 
chief  deputy  shall  execute  to  the  people  of  the  state  a  bond  in 
the  penal  sum  of  fifty  thousand  dollars,  with  corporate  surety 
or  two  sureties  to  be  approved  by  the  controller  and  treasurer 
of  the  state,  conditioned  for  the  faithful  discharge  of  the  duties 
of  the  superintendent  while  such  deputy  acts  as  superintend- 
ent, and  upon  filing  such  bond  such  deputy  shall  have  all  the 
power  and  duties  of  superintendent  of  banks,  until  the  inability 
of  the  superintendent  shall  be  removed,  or  until  a  new  super- 
intendent of  banks  shall  have  been  appointed  by  the  governor. 
No  superintendent  of  banks,  chief  deputy  or  bank  examiner 
shall  be  or  shall  become  indebted,  directly  or  indirectly,  either 
as  borrower,  endorser,  surety,  or  guarantor  to  any  bank  under 
his  supervision  or  subject  to  his  examination. 

Sec.  122.  The  superintendent  of  banks  shall  have  his  prin- 
cipal office  in  the  city  of  San  Francisco,  and  may  also  have 


—  28  — 

suitable  rooms  in  the  city  of  Los  Angeles,  wherein  to  conduct 
the  business  of  the  state  banking  department.  The  superin- 
tendent shall,  from  time  to  time,  obtain  the  necessary  furniture, 
stationery,  fuel,  lights,  and  other  proper  conveniences  for  the 
transaction  of  such  business;  the  expense  of  which  shall  be 
paid  out  of  the  state  treasury  on  the  certificate  of  the  superin- 
tendent and  the  warrant  of  the  controller. 

Sec.  123.  A  fupd  is  hereby  created,  to  be  known  as  the 
state  banking  fund,  and  out  of  said  fund  shall  be  paid  all  the 
expenses  incurred  in  and  about  the  conduct  of  the  business  of 
the  banking  department,  including  the  salary  of  the  superin- 
tendent, chief  deputy,  attorney,  clerks  and  examiners,  travel- 
ing expenses,  furnishing  of  rooms  and  rent.  Each  bank  shall 
pay  annually  its  share  of  the  total  amount  of  the  salaries  and 
expenses  of  the  banking  department,  to  be  determined  by  the 
proportion  which  the  deposits  of  any  such  bank  bear  to  the 
aggregate  deposits  of  all  such  banks  receiving  certificates  of 
authorization  from  the  superintendent  of  banks,  as  shown  by 
the  last  report  of  such  bank  to  the  superintendent  of  banks. 

All  moneys  collected  or  received  by  the  superintendent  of 
banks,  under  and  by  virtue  of  the  provisions  of  this  act,  shall 
be  by  him  delivered  to  the  treasurer  of  the  state,  who  shall 
deposit  the  same  to  the  credit  of  said  banking  fund,  and  the 
unexpended  balances  of  all  moneys  heretofore  paid  into  the 
state  treasury  by  any  of  the  bank  commissioners  shall  be 
retained  and  become  a  part  of  said  fund.  If  any  such  bank 
shall  fail  to  pay  such  charges  as  are  herein  required,  the  super- 
intendent shall  forthwith  cancel  the  certificate  of  said  bank. 

Sec.  124.  Every  bank  shall  be  subject  to  the  inspection  of 
the  superintendent  of  banks.  The  superintendent  of  banks, 
the  chief  deputy,  or  some  competent  person  or  persons  to  be 
appointed  by  the  superintendent  of  banks,  to  be  known  as 
examiners,  shall  visit  and  examine  every  bank,  other  than  a 
savings  bank,  at  least  twice  in  each  year,  and  every  savings 
bank  at  least  once  in  each  year.  On  every  such  examination 
inquiry  shall  be  made  by  him  as  to  the  condition  and  resources 
of  the  bank,  the  mode  of  conducting  and  managing  its  affairs, 
the  action  of  its  directors,  the  investment  and  disposition  of  its 
funds,  the  safety  and  prudence  of  its  management,  the  security 
afforded  to  those  by  whom  its  engagements  are  held  and 
whether  the  requirements  of  its  articles  of  incorporation  and 
the  law  have  been  complied  with  in  the  administration  of  its 
affairs,  and  as  to  such  other  matters  as  the  superintendent  may 
prescribe.  He  shall  have  power  in  like  manner  to  examine 
every  bank  whenever,  in  his  judgment,  its  condition  and  man- 
agement is  such  as  to  render  &n  examination  of  its  affairs 
necessary  or  expedient. 

He  shall  also  have  power  to  examine,  or  cause  to  be  exam- 
ined, every  agency  located  in  this  state  of  any  foreign  bank  or 


—  29  — 

banking  corporation,  for  the  purpose  of  ascertaining-  whether 
it  has  complied  with  the  laws  of  the  state,  and  for  such  other 
purposes  and  as  to  such  other  matters  as  the  superintendent 
may  prescribe. 

The  superintendent,  chief  deputy,  and  every  such  examiner 
shall  have  the  power  to  administer  an  oath  to  any  person  whose 
testimony  he  may  require  on  the  examination  of  any  bank,  or 
on  the  examination  of  any  agency  of  any  foreign  bank  or  bank- 
ing corporation,  and  to  compel  appearance  and  attendance  of 
any  such  person  for  the  purpose  of  any  such  examination. 
The  result  of  such  examination  shall  be  certified  by  the  persons 
making  the  examination  on  the  records  of  the  bank  examined. 

When  a  bank  shall  have  been  examined  by  any  examiner, 
and  he  finds  securities  therein  which  are,  in  his  judgment,  of 
doubtful  value,  he  shall  report  the  same  to  the  superintend- 
ent of  banks,  who  thereupon  shall  be  authorized  to  employ 
appraisers  to  appraise  said  securities,  at  a  compensation  to  be 
fixed  by  the  superintendent  of  banks. 

Sec.  125.  Every  examiner  appointed  by  the  superintendent 
of  banks  shall,  before  entering  upon  the  discharge  of  his  duties, 
take  the  constitutional  oath  of  office  and  cause  the  same  to  be 
filed  in  the  office  of  the  secretary  of  state.  No  such  examiner 
shall  be  appointed  receiver  of  any  bank  whose  books,  papers 
and  affairs  he  shall  have  examined  pursuant  to  his  appoint- 
ment. 

Sec.  126.  If  the  chief  deputy  or  any  examiner  shall  have 
knowledge  of  the  insolvency  or  unsafe  condition  of  any  bank 
mentioned  in  this  act,  and  that  it  is  unsafe  or  inexpedient  to 
permit  said  bank  to  continue  business,  and  shall  neglect  to 
forthwith  report  such  fact  in  writing  over  his  signature  to  the 
superintendent  of  banks,  he  shall  be  guilty  of  felony. 

Sec.  127.  No  bank  shall  transact  any  business  in  this  state 
without  the  written  approval  of  the  superintendent  of  banks, 
and  without  his  written  certificate  stating  that  it  has  complied 
with  the  provisions  of  this  act,  and  with  all  the  requirements 
of  law,  and  that  it  is  authorized  to  transact,  within  this  state, 
the  business  specified  therein,  and  that  the  requisite  capital 
has  been  in  good  faith  subscribed  and  paid  up  in  cash  or,  if 
organized  without  capital  stock  that  it  has  accumulated  the 
requisite  surplus  or  reserve  fund.  Before  issuing  such  certifi- 
cate the  superintendent  of  banks  shall  examine,  or  cause  an 
examination  to  be  made,  in  order  to  ascertain  whether  the 
requisite  capital  of  such  bank  has  been  paid  up  in  cash  or  the 
requisite  reserve  or  surplus  fund  has  been  accumulated.  The 
superintendent  of  banks  shall  not  authorize  such  bank  to  com- 
mence business  until  it  appears  from  such  examination,  or 
other  evidence  satisfactory  to  him,  that  the  requisite  capital 
has  been,  in  good  faith,  subscribed  and  paid  in  in  cash,  or 
that  the  requisite  surplus  or  reserve  fund  has  been  accumulated 


—  30  — 

or  paid  in  in  cash,  and  until  such  bank  shall  have  paid  a  fee 
of  fifty  dollars.  Every  person  who  neglects  to  comply  with  any 
requirement  of  this  section  shall  be  guilty  of  a  misdemeanor. 

Sec.  128.  When  the  articles  of  incorporation  shall  have  heeh 
filed  with  the  secretary  of  state,  and  application  made  for  the 
issuance  of  a  certificate  to  do  business  as  a  bank,  the  superin- 
tendent of  banks  shall  ascertain,  from  the  best  sources  of 
information  at  his  command,  whether  the  character  and  general 
fitness  of  the  persons  named  as  stockholders  are  such  as  to 
command  the  confidence  of  the  community  in  which  such  bank 
is  proposed  to  be  located,  and,  if  so  satisfied,  he  shall,  within 
sixty  days  after  such  application  has  been  made  to  him,  issue, 
under  his  hand  and  official  seal,  the  certificate  of  authorization 
required  by  this  act.  The  superintendent  of  banks  shall  trans- 
mit such  certificate  of  authorization  to  the  county  clerk  of  such 
county,  who  shall  file  the  same;  the  superintendent  of  banks 
shall  also  file  a  duplicate  of  such  certificate  in  his  own  office. 

Sec.  129.  Every  bank  doing  a  departmental  business  shall 
render  to  the  superintendent  of  banks  for  each  department 
conducted  by  it,  a  separate  report  showing  in  detail  as  required 
by  section  one  hundred  thirty  of  this  act,  the  actual  financial 
condition  of  such  department  and  shall  at  the  time  of  furnish- 
ing said  report  separately  publish  the  statement  for  each 
department  as  provided  in  section  one  hundred  thirty-two  of 
this  act. 

Sec.  130.  Every  bank  doing  business  in  this  state  shall, 
whenever  required  by  the  superintendent  of  banks,  make  a 
report  in  writing  to  him,  verified  by  the  oath  of  its  president 
and  its  secretary  or  cashier,  or  two  principal  officers.  Such 
reports  shall  show  the  actual  financial  condition  of  the  bank 
making  the  report,  at  the  close  of  any  past  day  specified  by 
the  superintendent,  and  shall  specify  the  foUowin^:: 

1.  The  amount  of  its  capital  stock  and  the  number  of  shares 
into  which  it  is  divided,  or,  if  not  incorporated,  the  amount  of 
capital  actually  paid  in,  and  by  whom. 

2.  The  names  of  the  directors  and  the  number  of  shares  of 
stock  held  by  each,  or,  if  not  incorporated,  the  names  of  each 
member  of  the  firm  and  the  amount  of  capital  paid  in  by  each. 

3.  The  total  amount  of  capital  actually  paid  up  in  money, 
and  the  total  amount  of  contingent  and  other  reserve  funds, 
if  any. 

4.  The  total  amount  due  the  depositors. 

5.  The  total  amount  and  character  of  any  other  liabilities  it 
may  have. 

6.  The  amount  at  which  the  lot  and  building  occupied  by  the 
bank  for  the  transaction  of  its  regular  business  stands  debited 
on  its  books,  together  with  the  market  value  of  all  other  real 
estate  held,  whether  acquired  in  settlement  of  loans  or  other- 
wise ;  the  amount  at  which  it  stands  debited  on  the  bank  books, 


—•31  — 

in  what  counties  situated,  and  in  what  name  the  title  is  vested, 
if  not  in  the  name  of  the  bank  itself. 

7.  The  amount  loaned  on  real  estate,  specifying  the  amount 
secured  on  real  estate  in  each  county  separately ;  also  specify- 
ing the  name  of  the  person  in  whose  name  the  property  is  held 
in  trust  or  as  security,  in  case  it  is  held  in  any  name  other  than 
that  of  the  bank  and.  the  instrument  creating  the  security  does 
not  itself  disclose  the  name  of  the  bank. 

8.  The  amount  invested  in  bonds,  designating  the  name  and 
amount  of  each  particular  kind. 

9.  The  amount  loaned  on  stocks  and  bonds,  designating  each 
particular  class  and  the  amount  thereof.' 

10.  The  amount  of  money  loaned  on  other  securities,  with  a 
particular  designation  of  each  class  and  the  amount  loaned 
on  each. 

11.  The  actual  amount  of  money  on  hand  or  deposited  in  any 
other  bank  or  place,  with  the  name  of  the  place  where  deposited 
and  the  amount  in  each  place. 

12.  Any  other  property  held,  or  any  amount  of  money 
loaned,  deposited,  invested  or  placed,  not  otherwise  herein 
enumerated,  and  the  place  where  situate  and  the  value  of  said 
property,  and  the  amount  so  loaned,  deposited  or  placed,  and 
any  other  information  he  may  request  relative  to  the  conduct 
and  affairs  of  such  bank. 

The  oaths  of  the  officers  and  the  statements  above  required 
shall  state  that  they  and  each  of  them  have  a  personal  knowl- 
edge of  the  matters  therein  contained,  and  that  they  believe 
every  allegation,  statement,  matter,  and  thing  therein  contained 
is  true.  Any  willful  false  statement  in  the  premises  shall  be 
perjury  and  shall  be  punished  as  such. 

•Sec.  131.  The  superintendent  of  banks  shall  call  for  reports 
specified  by  the  previous  section,  at  least  three  times  each  year, 
and  shall  call  for  such  reports  as  near  as  possible  upon  the 
same  days  as  those  designated  by  the  comptroller  of  the  cur- 
rency of  the  United  States  for  reports  of  national  banking 
associations. 

Sec.  132.  At  the  time  of  furnishing  such  report  to  the 
superintendent  of  banks,  every  bank  shall  also  publish  a  con- 
densed statement  of  its  financial  condition,  at  least  once,  in 
some  newspaper  of  general  circulation,  published  in  the  city 
or  town  where  its  principal  place  of  business  is  located,  and,  if 
no  paper  is  published  in  such  town,  then  in  some  newspaper  of 
general  circulation  in  the  county  where  its  principal  place  of 
business  is  located.  Such  published  statement  shall  show  the 
total  amount  of  loans,  the  total  amount  of  overdrafts,  the  total 
amount  invested  in  bonds  and  other  securities,  the  total  amount 
due  from  banks,  the  total  amount  of  checks  and  other  cash 
items,  the  total  amount  of  cash  on  hand,  capital  paid  in,  surplus 
funds ;  undivided  profits,  less  expenses  and  taxes  paid ;  due  to 


—  32  — 

other  banks  and  bankers,  due  to  trust  companies  and  savings 
banks;  individual  deposits  subject  to  checks;  demand  certifi- 
cates of  deposit;  time  deposits;  certified  checks;  cashier's 
checks  outstanding;  and  such  other  items  as  will  show  the 
actual  financial  condition  of  the  bank  making  the  report. 

Sec.  133.  "Whenever  the  superintendent  of  banks  shall  have 
reason  to  believe  that  the  capital  of  any  bank  is  reduced  by 
impairment  or  otherwise  below  the  amount  required  by  law 
or  by  its  articles  of  incorporation,  he  may  require  such  bank 
to  make  good  the  deficiency  within  sixty  days  after  the  date  of 
such  requisition.  He  may  examine  or  cause  to  be  examined 
any  such  bank  to  ascertain  the  amount  of  such  impairment  or 
reduction  of  capital  and  whether  the  deficiency  has  been  made 
good  as  required  by  him. 

Sec.  134.  If  it  shall  appear  to  the  superintendent  of  banks 
that  any  bank  has  violated  its  articles  of  incorporation,  or  any 
law  binding  upon  it,  he  must,  by  an  order  under  his  hand  and 
official  seal,  which  seal  must  be  adopted  by  him,  addressed  to 
such  bank,  direct  the  discontinuance  of  such  violation ;  or,  if  it 
shall  appear  to  the  superintendent  of  banks  that  such  bank  is 
conducting  business  in  aji  unsafe  or  injurious  manner,  he  must 
in  like  manner  direct  the  discontinuance  of  such  unsafe  or 
injurious  practices.  Such  order  shall  require  such  bank  to 
show  cause,  before  the  superintendent  of  banks,  at  a  time  and 
place  to  be  fixed  by  him,  why  said  order  should  not  be  observed. 
If  upon  such  hearing  it  shall  appear  to  the  superintendent  of 
bante  that  such  bank  is  conducting  business  in  an  unsafe  or 
injurious  manner,  or  is  violating  its  articles  of  incorporation, 
or  any  law  of  this  state,  then  the  superintendent  of  banks  shall 
make  such  order  of  discontinuance  final,  and  such  bank  shall 
immediately  discontinue  all  practices  named  in  such  order  by 
the  superintendent  of  banks.  Such  bank  shall  have  ten  days 
after  any  such  order  is  made  final  in  which  suit  may  be  com- 
menced to  restrain  enforcement  of  such  order,  and  unless  such 
action  be  so  commenced  and  enforcement  of  said  order  be 
enjoined  within  ten  days,  by  the  court  in  which  such  suit  is 
brought,  then  such  bank  shall  comply  with  such  order ;  and,  in 
the  event  of  its  failure  so  to  do,  then  the  superintendent  of 
banks  shall  have  power  to  take  immediate  charge  and  control 
of  said  bank,  and  liquidate  its  affairs  in  the  manner  provided 
in  this  act  for  the  liquidation  of  banks. 

Sec.  135.  In  any  such  action,  no  damage  may  be  awarded, 
but  the  action  otherwise  shall  be  commenced,  tried  and  deter- 
mined according  to  the  provisions  of  the  Code  of  Civil  Pro- 
cedure of  California. 

Sec.  136.  Whenever  the  superintendent  of  banks  shall  have 
reason  to  conclude  that  any  bank  is  in  an  unsound  or  unsafe 
condition  to  transact  the  business  for  which  it  is  organized,  or 
that  it  is  unsafe  or  inexpedient  for  it  to  continue  business,  the 


—  33  — 

superintendent  of  banks  may  forthwith  take  possession  of  the 
property  and  business  of  such  bank,  and  retain  such  possession 
until  such  bank  shall  resume  business,  or  its  affairs  be  finally 
liquidated,  as  herein  provided. 

On  taking  possession  of  the  property  and  business  of  any 
such  bank,  the  superintendent  of  banks  shall  forthwith  give 
notice  in  writing  of  such  fact  to  any  and  all  corporations  and 
individuals  holding  or  in  possession  of  any  of  the  assets  of 
such  bank. 

No  bank,  corporation  or  individual,  knowing  of  such  taking 
possession  by  the  superintendent  of  banks,  or  notified  as  afore- 
said, shall  have  a  lien  or  charge  for  any  payment,  advance 
or  clearance  thereafter  made,  or  liability  thereafter  incurred 
against  any  of  the  assets  of  the  bank  of  whose  property  and 
business  the  superintendent  of  banks  shall  have  taken  posses- 
sion as  aforesaid.  Such  bank  may,  with  the  consent  of  the 
superintendent  of  banks,  resume  business  upon  such  conditions 
as  may  be  approved  by  him. 

Upon  taking  possession  of  the  property  and  business  of  such 
bank,  the  superintendent  of  banks  is  authorized  to  collect 
moneys  due  to  such  bank,  and  to  do  such  other  acts  as  are 
necessary  to  conserve  its  assets  and  business,  and  shall  proceed 
to  liquidate  the  affairs  thereof  as  hereinafter  provided. 

The  superintendent  of  banks  shall  collect  all  debts  due  and 
claims  belonging  to  it,  and  upon  the  order  of  the  superior  court 
may  sell  or  compound  all  bad  or  doubtful  debts,  and  on  like 
order  may  sell  all  real  and  personal  property  of  such  bank  on 
such  terms  as  the  court  shall  direct;  and  may,  if  necessary  to 
pay  the  debts  of  such  bank,  enforce  individual  liability  of  the 
stockholders  by  action  to  be  brought  within  three  years  after 
the  date  of  his  taking  possession  of  the  affairs  of  such  bank. 

The  superintendent  of  banks  may,  under  his  hand  and  official 
seal,  appoint  one  or  more  special  deputy  superintendents  of 
banks,  as  agent  or  agents,  to  assist  him  in  the  duty  of  liquida- 
tion and  distribution,  the  certificate  of  appointment  to  be  filed 
in  the  office  of  the  superintendent  of  banks,  and  a  certified  copy 
in  the  office  of  the  clerk  of  the  county  in  which  the  principal 
office  of  such  bank  is  located. 

The  superintendent  of  banks  may,  from  time  to  time,  author- 
ize a  special  deputy  superintendent  to  perform  such  duties 
connected  with  such  liquidations  and  distribution  as  the  super- 
intendent of  banks  may  deem  proper.  The  superintendent  of 
banks  may  employ  such  counsel,  and  procure  such  expert 
assistance  and  advice  as  may  be  necessary  in  the  liquidation 
and  distribution  of  the  assets  of  such  bank,  and  may  retain 
such  officers  or  employees  of  such  bank  as  he  may  deem  neces- 
sary. The  superintendent  of  banks  shall  require,  from  a  special 
deputy  superintendent  and  from  such  assistants,  such  security 

3— BA 


—  34  — 

for  the  faithful  discharge  of  their  duties  as  he  may  deem 
proper. 

The  superintendent  of  banks  shall  cause  notice  to  be  given 
by  advertisement  in  such  newspapers  as  he  may  direct,  weekly, 
for  three  consecutive  months,  calling  on  all  persons  who  may 
have  claims  against  such  bank,  to  present  the  same  to  the 
superintendent  of  banks,  and  make  legal  proof  thereof,  at  a 
place  and  within  a  time  not  more  than  six  months  after  the 
last  day  of  publication,  to  be  therein  specified. 

The  superintendent  of  banks  shall  mail  a  copy  of  such  notice 
to  all  persons  whose  names  appear  as  creditors  upon  the  books 
of  the  bank.  If  the  superintendent  of  banks  doubts  the  justice 
and  validity  of  any  claim,  he  may  reject  the  same  and  serve 
notice  of  such  rejection  upon  the  claimant,  either  by  mail  or 
personally.  An  affidavit  of  the  service  of  such  notice  shall  be 
prima  facie  evidence  thereof,  and  shall  be  filed  with  the  super- 
intendent of  banks.  An  action  upon  a  claim  so  rejected  must 
be  brought  within  six  months  after  such  service.  Claims 
presented  after  the  expiration  of  the  time  fixed  in  the  notice 
to  creditors  shall  be  entitled  to  share  ratably  in  the  distribution 
to  the  extent  of  the  assets  in  the  hands  of  the  superintendent 
of  banks,  equitably  applicable  thereto. 

Upon  taking  possession  of  the  property  and  assets  of  such 
bank,  the  superintendent  of  banks  shall  make  an  inventory  of 
the  assets  of  such  bank  in  duplicate,  one  to  be  filed  in  the  office 
of  the  superintendent  of  banks,  and  one  in  the  office  of  the 
clerk  of  the  county  in  which  the  principal  office  of  such  bank 
is  located;  upon  the  expiration  of  the  time  fixed  for  the 
presentation  of  claims,  the  superintendent  of  banks  shall  make 
in  duplicate  a  full  and  complete  list  of  the  claims  presented, 
including  and  specifying  such  claims  as  have  been  rejected  by 
him,  one  to  be  filed  in  the  office  of  the  superintendent  of  banks, 
and  one  in  the  office  of  the  clerk  of  the  county  in  which  the 
principal  office  of  such  bank  is  located ;  such  inventory  and  list 
of  claims  shall  be  open  at  all  reasonable  times  for  inspection. 
The  compensation  of  the  special  deputy  superintendents, 
counsel,  and  other  officers  and  assistants,  and  all  expenses  of 
supervision  and  liquidation,  shall  be  fixed  by  the  superintend- 
ent of  banks  on  notice  to  such  bank,  and  shall  upon  his  certifi- 
cate be  paid  out  of  the  funds  of  such  bank  in  his  hands. 

The  sums  collected  by  the  superintendent  of  banks  shall, 
from  time  to  time,  be  deposited  in  one  or  more  banks  in  this 
state,  subject  to  examination  by  the  superintendent  of  banks. 
At  any  time  after  the  expiration  of  the  date  fixed  for  the 
presentation  of  claims,  the  superintendent  of  banks  may,  out 
of  the  funds  remaining  in  his  hands  after  the  payment  of 
expenses,  declare  one  or  more  dividends,  and  after  the  expira- 
tion of  one  year  from  the  date  of  first  publication  of  notice  to 
creditors  he  may  declare  a  final  dividend. 


—  35  — 

Objection  to  any  claim  not  rejected  by  the  superintendent 
of  banks  may  be  made  by  any  party  interested,  by  filing  a  copy 
of  such  objection  with  the  superintendent  of  banks,  who  shall 
present  the  same  to  the  superior  court  of  the  county  in  which 
such  bank  has  its  principal  place  of  business,  with  a  petition 
that  said  court  pass  upon  the  validity  of  such  claims ;  and  such 
court  shall  thereupon,  upon  such  notice  to  the  party  presenting 
the  same,  and  to  the  superintendent  of  banks,  as  the  court  may 
deem  proper,  accept  or  reject  said  claim,  and  the  superintend- 
ent of  banks  shall  observe  the  order  of  the  court  in  that  regard ; 
provided,  however,  that  should  the  claim  be  rejected,  such  rejec- 
tion shall  not  conclude  the  claimant  from  bringing  an  action 
upon  such  claim  within  six  months  after  such  rejection. 

Upon  the  petition  of  the  superintendent  of  banks,  such  court 
may  make  proper  provisions  for  unclaimed  deposits. 

Whenever  any  such  bank,  of  whose  property  and  business 
the  superintendent  of  banks  has  taken  possession  as  aforesaid, 
deems  itself  aggrieved  thereby,  it  may  at  any  time  within  ten 
days  after  such  taking  possession,  and  not  thereafter,  apply  to 
the  superior  court  in  the  county  in  which  the  principal  office 
of  such  bank  is  located,  to  enjoin  further  proceedings ;  and  said 
court,  after  citing  the  superintendent  of  banks  to  show  cause 
why  further  proceedings  should  not  be  enjoined,  and  upon 
hearing  the  allegations  and  proofs  of  the  parties,  and  deter- 
mining the  facts,  may,  upon  the  merits,  dismiss  such  applica- 
tion, or  enjoin  the  superintendent  of  banks  from  further 
proceedings,  and  direct  him  to  surrender  such  business  and 
property  to  such  bank. 

Either  party  aggrieved  by  the  judgment  rendered  thereon 
may  appeal  therefrom  to  the  supreme  court,  as  in  other  cases 
of  appeal  thereto  from  the  judgment  of  a  superior  court. 

An  appeal  as  above  provided  shall  operate  as  a  stay  of  the 
judgment  of  the  superior  court,  and  no  bond  need  be  given  if 
the  appeal  be  taken  by  the  superintendent  of  banks;  but  if 
the  appeal  be  taken  by  such  bank,  a  bond  shall  be  given,  as 
required  by  section  nine  hundred  and  forty-three  of  the  Code 
of  Civil  Procedure. 

Whenever  the  superintendent  of  banks  shall  have  paid  to 
each  and  every  depositor  and  creditor  of  such  corporation  (not 
including  stockholders)  whose  claim  or  claims  as  such  creditor 
or  depositor  shall  have  been  duly  approved  and  allowed  the 
full  amount  of  such  claim,  and  shall  have  made  proper  pro- 
visions for  unclaimed  and  unpaid  deposits  or  dividends,  and 
shall  have  paid  all  expenses  of  the  liquidation,  the  superin- 
tendent of  banks  shall  call  a  meeting  of  the  stockholders  of 
such  corporation  by  giving  notice  thereof  for  thirty  days,  in 
one  or  more  newspapers  published  in  the  county  where  the 
principal  office  of  such  corporation  is  located.  At  such  meet- 
ing, the  superintendent  of  banks  shall  appear  and  deliver  to 


—  36  — 

the  stockholders  all  the  property,  effects  and  records  of  such 
bank,  and  upon  such  transfer  and  delivery  he  shall  be  dis- 
charged from  any  and  all  further  liability  to  such  bank  and 
its  creditors.  And  thereupon  the  bank  shall  be  in  the  same 
position  as  though  it  had  never  been  authorized  to  trans- 
act a  banking  business,  and  such  bank,  by  fulfilling  the  require- 
ments of  this  act,  and  of  the  superintendent  of  banks,  can 
thereafter  be  authorized  to  resume  the  conduct  of  its  business 
as  a  bank. 

Sec.  137.  1.  Any  bank  shall  have  the  right,  on  application 
of  the  stockholders  or  members  to  apply  to  the  superior  court 
of  the  county  wherein  its  principal  place  of  business  is  situated, 
to  dissolve  said  bank  in  the  manner  provided  for  in  title  six, 
part  three  of  the  Code  of  Civil  Procedure. 

2.  It  is  hereby  made  the  duty  of  every  person  or  corporation 
holding  funds  of  any  bank,  at  the  end  of  five  years  from  and 
after  such  bank  has  ceased  to  receive  deposits,  or  do  business, 
to  pay  the  same  into  the  state  treasury,  which  money  shall  be 
held  in  the  state  school  land  fund;  and  at  the  same  time  it 
shall  be  the  duty  of  such  person  or  corporation  to  furnish  to 
the  state  controller  a  list  of  the  names  of  all  depositors  to  whom 
said  moneys  belong  or  to  whom  said  bank  owes  the  same. 

3.  The  money  may  be  drawn  out  on  the  warrants  of  the  state 
controller,  issued  on  proofs  of  ownership,  approved  and  allowed 
by  the  state  board  of  examiners. 

4.  All  moneys  paid  into  the  said  fund,  uncalled  for  within 
five  years  after  being  paid  in,  shall  by  operation  of  law,  and 
without  action  had,  escheat  to  the  state,  and  thereafter  only 
be  drawn  out  in  such  manner  as  now  provided  for  by  law  for 
the  estates  of  deceased  persons  escheated  to  this  state. 

5.  The  state  board  of  examiners  must  invest  such  moneys  in 
the  same  manner  that  the  state  school  land  fund  is  invested 
as  provided  by  law.  But  any  claimant  shall  be  entitled  to 
recover  as  herein  provided  only  the  principal  so  paid  into  the 
state  treasury. 

Sec.  138.  If  any  bank  shall  fail  to  make  the  report  required 
by  law  or  by  the  superintendent  of  banks,  within  ten  days  from 
the  day  designated  for  the  making  thereof,  or  to  include  therein 
any  matter  required  by  law  or  by  the  superintendent  of  banks, 
every  such  delinquent  bank  shall  forfeit  to  the  people  of  the 
state  the  sum  of  one  hundred  dollars  for  each  day  that  such 
report  shall  be  delayed  or  withheld,  and  for  every  day  it  shall 
fail  to  report  any  such  omitted  matter.  In  the  event  of  the 
failure  of  any  such  bank  to  make  the  report  required  from  it 
by  law,  or  by  the  superintendent  of  banks,  he  shall  immediately 
cause  the  books,  papers  and  affairs  of  such  bank  to  be  thor- 
oughly examined. 

Sec.  139.  It  shall  be  the  duty  of  the  board  of  directors  of 
every  bank  to  examine  fully  into  the  books,  papers  and  affairs 


—  37  — 

of  the  bank  of  which  they  are  directors,  and  particularly  into 
the  loans  and  discounts  thereof,  with  a  special  view  to  ascer- 
taining the  value  and  security  thereof,  and  of  the  collateral 
security,  if  any  given,  in  connection  therewith,  and  into  such 
other  matters  as  the  superintendent  of  banks  may  require; 
such  examination  to  be  made  at  least  once  a  year,  but  no  such 
subsequent  yearly  examinations  shall  be  made  within  three 
months  of  the  next  preceding  examination.  Such  directors 
shall  have  power  to  employ  such  assistance  in  making  such 
examinations  as  they  may  deem  necessary.  Within  ten  days 
after  the  completion  of  such  examination,  a  report  in  writing 
thereof,  sworn  to  by  the  directors  making  the  same,  shall  be 
made  by  the  board  of  directors  of  such  bank,  and  placed  on  file 
with  the  records  of  said  bank,  and  shall  be  subject  to  examina- 
tion by  the  superintendent  of  banks. 

Such  report  shall  particularly  contain  a  statement  of  the 
assets  and  liabilities  of  the  bank  examined,  as  shown  by  its 
books,  together  with  any  deductions  from  the  assets,  or  addi- 
tions to  liabilities,  which  such  directors  or  committee,  after 
such  examination,  may  determine  to  make.  It  shall  also  con- 
tain a  statement,  in  detail,  of  loans,  if  any,  which  in  their 
opinion  are  worthless  or  doubtful,  together  with  their  reasons 
for  so  regarding  them;  also  a  statement  of  loans  made  on 
collateral  security,  which  in  their  opinion  are  insufficiently 
secured,  giving  in  each  case  the  amount  of  the  loan,  the  name 
and  market  value  of  the  collateral,  if  it  has  any  market  value, 
and,  if  not,  a  statement  of  that  fact,  and  its  actual  value  as 
nearly  as  possible.  Such  report  shall  also  contain  a  statement 
of  overdrafts,  of  the  names  and  amounts  of  such  as  they  con- 
sider worthless  or  doubtful,  and  a  full  statement  of  such  other 
matters  as  affect  the  solvency  and  soundness  of  the  bank.  If 
the  directors  of  such  bank  shall  fail  to  make,  or  cause  to  be 
made,  and  file  such  report  of  examination  in  the  manner  and 
within  the  time  specified,  the  directors  of  such  bank  shall  be 
guilty  of  a  misdemeanor. 

Sec.  140.  The  superintendent  of  banks  shall  report  during 
the  month  of  October  of  each  year,  to  the  governor,  for  sub- 
mission to  the  next  ensuing  session  of  the  legislature : 

1.  A  summary  of  the  state  and  condition  of  every  bank 
required  to  report  to  him,  and  from  which  reports  have  been 
received  the  preceding  year,  with  an  abstract  of  the  whole 
amount  of  capital  returned  by  them,  the  whole  amount  of  their 
debts  and  liabilities,  and  the  total  amount  of  means  and 
resources,  specifying  the  amount  of  specie  held  by  them  at  the 
time  of  the  last  report  to  him,  and  such  other  information  in 
relation  to  such  banks  as,  in  his  judgment,  may  be  useful. 

2.  A  statement  of  all  banks  authorized  by  him  to  do  business 
during  the  previous  year,  with  their  names  and  locations  and 
dates  of  incorporation,  and  particularly  designating  such  as 
have  commenced  business  during  the  year. 


—  38  — 

3.  A  statement  of  the  banks  whose  business  has  been  closed 
during  the  year. 

4.  Any  amendments  to  the  banking  law,  which,  in  his  judg- 
ment, may  be  desirable. 

5.  The  names  and  compensation  of  all  persons  employed  by 
him,  and  the  whole  amount  of  the  receipts  and  expenses  of  the 
department  during  the  year. 

6.  The  names  of  banks  placed  in  his  hands  in  process  of 
liquidation,  and  the  amount  of  dividends  paid  thereon. 

Such  report,  and  the  usual  number  of  copies  for  the  use  of 
the  legislature,  shall  be  printed  and  in  readiness  for  distribu- 
tion by  the  state  printer,  and  one  thousand  copies  shall  be 
printed  for  the  use  of  the  department,  the  expense  of  which 
shall  be  charged  among  the  general  expenses  of  the  department. 

Sec.  141.  1.  The  superintendent  of  banks  shall  keep  in  his 
office,  in  a  place  accessible  to  the  general  public,  a  bulletin 
board  upon  which  he  shall  cause  to  be  posted  at  noon  on  Friday 
of  each  week  a  detailed  statement,  signed  by  him  or,  in  case  of 
his  absence  from  San  Francisco  or  inability  to  act,  by  the 
deputy  superintendent  in  charge,  giving  the  following  items  of 
general  information  with  regard  to  the  work  of  the  department 
since  the  preceding  statement : 

(a)  The  name  of  every  bank  that  has  filed  in  the  banking 
department  an  application  for  authorization  to  commence  busi- 
ness, its  location  and  the  date  of  filing  of  such  application. 

(h)  The  name  and  location  of  every  bank  authorized  by  the 
superintendent  of  banks  to  commence  business,  its  capital,  sur- 
plus, and  the  date  of  authorization. 

(c)  The  name  of  every  bank  to  which  a  certificate  of  author- 
ization has  been  refused  by  the  superintendent  of  banks,  and 
the  date  of  notice  of  refusal. 

{d)  The  name  and  residence  of  every  person  appointed  by 
the  superintendent  of  banks  as  a  deputy,  examiner  or  employee 
in  the  banking  department,  the  title  of  the  office  to  which 
appointed,  the  compensation  paid,  and  the  date  of  appointment. 

(e)  The  date  on  which  a  call  for  a  report  by  banks  was 
issued  by  the  superintendent  of  banks,  and  the  day  designated 
as  the  day  with  reference  to  which  such  report  should  be  made. 

if)  The  name  and  location  of  every  bank  whose  creditors  or 
depositors  have  been  paid  in  full  by  the  superintendent  of 
banks  and  a  meeting  of  whose  stockholders  shall  have  been 
called,  together  with  date  of  notice  of  meeting  and  date  of 
meeting. 

(g)  The  name  and  location  of  every  bank  subject  to  the 
banking  law  whose  affairs  and  business  shall  have  been  finally 
liquidated,  or  in  course  of  liquidation. 

(h)  The  name  and  location  of  every  bank  which  has  applied 
for  approval  of  a  change  of  name,  and  the  name  proposed. 


—  39  — 

2.  Every  such  bulletin,  after  having  been  posted  as  afore- 
said for  one  week,  shall  be  placed  on  a  file  for  such  statements, 
to  be  kept  in  the  office  of  the  superintendent  of  banks.  All 
such  statements  shall  be  public  documents,  and  at  all  reason- 
able times  shall  be  open  to  public  inspection  during  usual  bank- 
ing hours. 

Sec.  142.  Every  official  report  made  by  the  superintendent 
and  every  report  duly  verified  of  an  examination  made,  shall 
be  prima  facie  evidence  of  the  facts  therein  stated,  for  all 
purposes  in  any  action  or  proceeding  wherein  such  bank  is  a 
party. 

Sec.  143.  If  the  superintendent  of  banks  shall  have  knowl- 
edge of  the  insolvency  or  unsafe  condition  of  any  bank  men- 
tioned in  this  act,  and  that  it  is  unsafe  or  inexpedient  to 
permit  said  bank  to  continue  business,  and  shall  neglect  to 
forthwith  take  action  as  provided  in  sections  one  hundred 
thirty-three,  one  hundred  thirty-four,  and  one  hundred  thirty- 
six  of  this  act,  he  shall  be  guilty  of  a  felony. 

Sec.  144.  Whenever  by  the  terms  of  this  act  a  penalty  or 
forfeiture  is  imposed,  the  same  shall  be  recovered  in  an  action 
brought  at  the  request  of  the  superintendent  of  banks  by  the 
attorney  general,  in  the  name  of  the  people  of  the  state,  and 
the  sum  recovered  shall  be  paid  into  the  state  banking  fund 
and  used  in  payment  of  claims  against  the  said  fund. 

Sec.  145.  The  powers,  privileges,  duties  and  restrictions 
conferred  and  imposed  upon  any  corporation  or  individual 
existing  and  doing  business  under  the  laws  of  this  state  are 
hereby  abridged,  enlarged  or  modified  as  each  particular  case 
may  require,  to  conform  to  the  provisions  of  this  act,  notwith- 
standing anything  to  the  contrary  in  their  respective  articles 
of  incorporation  or  charters.  The  legality  of  investments  here- 
tofore made,  or  of  transactions  heretofore  had,  pursuant  to 
any  provisions  of  law  in  force  when  such  investments  were 
made  or  transactions  had,  shall  not  be  affected  by  the  provi- 
sions of  this  act,  nor  shall  such  provisions  require  the  changing 
of  investments  for  those  named  in  this  act,  except  as  the  same 
can  be  done  gradually  by  the  sale  or  redemption  of  the  securi- 
ties so  invested  in,  in  such  manner  as  to  prevent  loss  or  embar- 
rassment in  the  business  of  such  bank,  or  unnecessary  loss  or 
injury  to  the  borrowers  on  such  security. 

Sec.  146.     All  acts,  or  parts  of  acts,  in  conflict  with  this  act 
are  hereby  repealed. 
Sec.  147.    This  act  shall  take  effect  July  first,  1909. 


INDEX. 


Section. 

Accounts,  overdrawing  by  officer,  etc.,  not  allowed 39 

Act,  applicable,  to  whom 1 

repeals  all  other  acts  in  conflict 146 

takes  effect,  when  147 

Action  to  liquidate,  subject  to  provisions  Code  of  Civil  Procedure.   135 

Adjustment  of  investments  made  prior  to  act 145 

Administrators  bond  to  be  reduced  when  estates  funds  deposited. .     93 

or  asignee  may  deposit  funds,  when 51 

Advertising  as  savings  bank,  not  allowed,  when 49 

capital  authorized  or  subscribed 14 

must  state  nature  of  banking  business  conducted 28 

Agency  of  foreign  bank  subject  to  examination 124 

Agent  dealing  with  bank 38-39 

Assets  of  bank  may  be  sold,  how 31 

of  departments  to  be  kept  separate 25 

purchasing  of  by  officer,  etc 42 

Authorization,  certificate  of,  must  be  filed  with  county  clerk 128 

Bank,  deemed  insolvent,  when  20 

department,  capital  of 23 

definition  and  divisions  of 2 

may  sell  assets,  how 31 

stock,  loans  on,  limited 44 

use  of  term  prohibited,  except 12 

Banks,  examination  of,  character  and  extent 124 

failing  to  make  report 138 

foreign,  examination  of  agency  124 

procedure  to  force,  into  liquidation  136 

must  discontinue  violations  of  law,  or  liquidate 134 

must  have  certificate  before  doing  business   127 

must  publish  report,  when 132 

must  report  to  superintendent 130-131 

mutual,  may  have  capital  stock 29 

Bankers,  names  of  private,  must  be  shown  in  name 13 

Banking  department,  state 120 

expenses  of 123 

partnership,  list  of  partners  of,  must  be  posted 18 

Bond  of  superintendent  of  bank 120 

of  trust  company;  not  required  by  court 94 

Bonds,  loan  on,  limited  46 

may  be  held  by  savings  bank,  what 61 

underwriting  and  guaranteeing  limited 36 

Books  of  departments  must  be  kept  separate 26 

Borrow,  who  can  not  borrow  from  banks 33 

Branch  banks,  requisite  for 9 

Building,  same  for  all  departments 26 

Bulletin  for  superintendent,  what  to  contain 140 

when  and  where  to  be  posted 140 

By-laws  of  savings  banks 64 

Business,  trust  company  retiring  from 102 


_  42  — 

Section. 

Capital,  authorized  or  subscribed,  advertising 14 

and  surplus  must  equal  ten  per  cent  of  deposits 19 

for  department  business 23 

of  bank,  when  impaired,  duty  of  superintendent 133 

paid  in  by  each  partner  must  be  posted 18 

requisite,  must  be  paid  in  before  certificate  issues 127 

stock  of  mutual  banks 29 

stock  of  savings  banks  necessary,  how  much 60 

Capitalizing,  procedure  in 29 

Cash  to  be  carried  by  savings  bank 68 

Certificate  of  authorization  to  be  filed  with  county  clerk 128 

of  deposit  of  savings  banks  are  transferable 63 

of  deposit,  savings  banks  may  issue 63 

of  superintendent,  obtained  before  transacting  business 24-127 

superintendent's,  must  be  posted 50 

to  do  banking  business,  procedure  to  obtain 8 

Character  of  incorporators  to  be  investigated 128 

Claims  against  bank  in  liquidation 136 

Clerks  of  state  banking  department 121 

dealing  with  banks 39 

Combining  departments 22 

Commercial  banks,  capital  stock  of 82 

definition  of 5 

loans  of 80 

loans  of,  limited 81 

loans  of,  to  directors  83 

may  be  conducted  by  corporation 3 

Comm ission  on  loans  not  allowed 39 

Contract  waiving  stockholders'  liability  invalid 40 

with  depositors,  savings  banks 64 

Corporation,  foreign  banking 7 

banking,  may  conduct  what  business  3 

what  papers  to  be  filed  by,  with  superintendent 8 

Counsel  fees  in  liquidation  matter 136 

Court  may  order  ofllcers  to  deposit  funds 51 

may  order  deposit  of  trust  funds 91 

estates  money  deposited 93 

"Create  debt,"  deposits  do  not 65 

Dead  depositors,  report  of,  and  publication  of  list  of 15 

Defin ition  of  bank 2 

commercial  bank  5 

savings  bank 4 

trust  company 6 

Department's  assets,  how  to  be  used 27 

authorized  22 

business  to  be  kept  separate 25 

capital  for  each,  when  combined 23 

certificate  to  be  obtained  before  opening 24 

deposits  25 

in  trust  companies 106 

money  reserve 25 

safe  deposit 30 

separate  account  in  each 26 

to  be  in  same  building 26 

transactions  between  25 

reports  to  superintendent,  to  be  separate 129 

Deposits,  additional  to  be  made  by  trust  company,  when 98 

advertising  for,  prohibited 12 

by  stockholders 21 

do  not  "create  debt" 66 

joint 16 

limited  19 

of  bonds  and  mortgages  by  trust  company 99 


—  43  — 

Section. 

Deposits,  of  married  women  and  minors 16 

of  savings  bank  with  other  banks 68 

of  trust  funds   16 

trust  company  must  make,  with  state 96 

with  other  banks 43 

Deputy  superintendent  of  banks  121 

duty  of 126 

Directors  borrowing  from  commercial  bank 83 

can  not  be  surety  or  endorser 33 

dealing  with  bank 38-39 

duties  of  139 

examinations  of  bank  by 139 

names  to  be  posted 17 

oath  of  office  of 11 

of  savings  bank  can  not  borrow 65 

can  not  be  surety  65 

par  value  of  stock  held  by,  to  be  posted 17 

who  eligible  as,  and  qualifications  for 10 

shall  not  sell  mortgages  to  bank 35 

Dividends   21 

of  savings  bank  limited  64 

on  deposits  made  with  state  by  trust  company 98 

Entries,  false 38 

Employees  can  not  borrow  from  bank 33 

shall  not  sell  mortgage  to  bank  35 

dealing  with  bank 38-39 

Estates,  money  may  be  deposited  with  trust  company 93 

Examiner  of  banks 121 

appointment  of 125 

bonds  of   125 

can  not  be  receiver 125 

duties  of  126 

oath  of 125 

Examination  of  bank  affairs  by  director 139 

by  examiner,  character  and  extent 124 

of  national  bank 48 

Executor,  bond  reduced  when  estates  money  deposited ^ 93 

may  deposit  estates  money 51 

Expenses  of  banking  department 123 

False  entries  38 

Foreign  banks,  examination  of  agency  of 124 

Foreign  corporations,  doing  banking  business 7 

service  of  papers  on 7 

Forfeiture  or  penalty  recovered  by  action  at  law 144 

Funds,  deposit  of,  in  other  banks 43 

state  banking  department • 123 

trust,  not  reserve 32 

Governor,  superintendent  to  report  to 140 

superintendent's  report  to,  what  to  contain 140 

Guaranteeing  of  bonds  limited 36 

Guardian  bond  reduced  when  estates  funds  deposited 93 

may  deposit  estates  funds  51 

Incorporators,  character  of,  of  banks 128 

Interest  on  state  deposit  of  trust  company 98 

to  be  paid  depositors  by  trust  companies 95 

unpaid,  not  profits   45 

Investments  by  savings  banks  61 

by  trust  companies 97-105 

Joint  deposits  16 

Law,  bank,  not  to  affect  transactions  already  made 144 

takes  effect   145 

governing  savings  banks  69 


—  44  — 

Section. 

Loans  by  savings  banks 67 

by  commercial  banlcs  limited  £0-81 

commission  on   39 

on  bonds  limited 46 

on  bank  stock  limited  44 

on  mining  shares  by  savings  bank  67 

on  own  capital  stock  prohibited 34 

on  stock  of  other  banks  by  savings  bank 67 

on  real  estate 44-67 

to  director  of  commercial  bank 83 

to  director  of  savings  bank  87 

to  officer  or  employee 33 

to  officer  of  savings  bank 65 

Liability  of  trust  companies 94 

Limitation  on  use  of  word  "trust"  104 

Liquidation,  subject  to  Code  of  Civil  Procedure 135 

forced,  procedure  on 136 

of  bank  for  violating  law,  when  to  be  ordered - 134 

voluntary    137 

Married  women,  deposits  of 16 

Mining  shares,  loans  on,  by  savings  bank 67 

M inors,  deposits  of 16 

Money,  amount  of,  to  be  kept  on  hand 20 

deposited  by  public  administrator,  how  drawn 92 

reserve  for  departments 25 

reserve  for  savings  bank  68 

Mortgages,  selling,  to  bank  by  officers,  etc 35 

trust  company  may  make,  to  the  state 97 

M utual  banks  may  have  capital  stock 29 

Names  of  private  bankers 13 

National  banks,  examination  of 48 

Newspaper,  publishing  report  of  bank  in 132 

publication  of  notice  of  capitalizing 29 

publishing  list  of  dead  depositors  in 15 

Notice  of  forced  liquidation 136 

Oaths,  can  be  administered  by  bank  department  officers 124 

of  director  of  bank 11 

of  examiner  of  banks 125 

Obligations,  purchasing  of,  by  officers,  etc.,  of  bank 41 

Office  of  superintendent  of  banks  122 

Officers  can  not  borrow  from  bank 33-65 

dealing  with  bank 38-39 

not  sell  mortgage  to  bank 35 

Overdrawing  account 39 

Partners,  names  of,  and  capital  stock  to  be  posted 18 

Penalty,  for  failure  to  report  to  superintendent 138 

or  forfeiture  recovered  by  action  at  law 144 

Personal  property  of  savings  bank 61 

Possession  of  unsafe  or  unsound  bank  by  superintendent 136 

Private  bankers,  names  of,  to  be  shown 13 

Process,  service  on  foreign  banking  corporation 7 

Property,  personal,  of  savings  bank 61 

Powers  of  officers  of  banking  department   124 

Procedure,  when  superintendent  takes  possession  of  bank 130 

for  capitalizing  corporations 24 

Profits,  interest  unpaid  not  45 

Public  administrator  may  deposit  with  trust  company 92 

Publ  ic  deposits  in  savings  banks  62 

Purchasing  assets  by  officers,  etc 42 

banks   31 


—  45  — 

Section. 

Purchasing,  obligations  by  officers,  etc 41 

own  capital  stock  34 

stock,  limited    37 

Real  estate,  loans  on,  by  bank 47 

savings  bank  may  purchase,  hold,  and  convey 61 

Reports,  false,  by  officer  or  employee 38 

failure  to,  penalty  of 138 

must  be  called  for,  when 131 

of  banks  to  superintendent,  number  and  times 130 

of  examination  made  by  directors 134 

of  directors,  what  to  contain 139 

of  trust  company 101 

of  superintendent  duly  verified,  prima  facie  evidence 142 

publication  of  132 

failure  of  superintendent  to,  bank  unsafe 143 

superintendent  to,  to  governor   140 

to  superintendent  from  departments  to  be  separate.- 124 

Receiver,  bank  examiner  can  not  be 125 

Reserve  fund 21 

money  20 

money  for  departments 25 

of  savings  bank 68 

Safe  deposit  department 30 

Sales  of  mortgages  and  securities  to  bank  by  officer,  etc 35 

Savings  bank,  business  of 66 

capital  of   60 

capital  and  surplus,  limit  of 19 

can  not  trade  in  property 62 

cash  to  be  carried  by 68 

contract  with  depositors  by 64 

definition  of 4 

deposits  do  not  "create  debt" 66 

deposits  with  other  banks 68 

directors  can  not  borrow  from  bank 65 

dividends   limited    64 

investments  of   * 61 

law  governing 69 

loans  of  67-68 

may  be  conducted  by  corporations  3 

•    may  borrow  money,  when  62 

may  issue  general  certificates  of  deposit 63 

may  pay  by  draft  62 

may  judge  securities,  when  62 

Savings,  use  of  word,  limited 49 

Selling  bank  and  assets 31 

Service  of  papers  on  foreign  corporations 7 

Signs  of  bank  must  show  business  transacted 28 

State  banking  department  created 120 

fund    123 

responsible  to  trust  company  for  deposits 98 

Statement  to  be  filed  with  superintendent  by  president,  what 15 

Stock  and  par  value  of,  held  by  director  to  be  posted 17 

capital  of  commercial  bank 82 

of  savings  bank 60 

of  trust  company 90 

loans  on  bank,  limited 44 

purchase  of,  prohibited 37 

Stockholder,  controlling,  shall  not  sell  mortgage  to  bank 35 

deposits  by    21 

liability,  waiving 40 

list  of,  to  be  made  public 17 

Superintendent  of  banks 120 

appointment  of 121 

bulletin,  what  to  contain  141 


—  46  — 

Section. 

Superintendent  of  banks,  certificate,  posting 50 

certificate  to  trust  company 100 

duties  of 7,  9,  11,  15,  20,  24,  48,  83,  96,  97,  98,  102," 

120,    121,    123,    124,    127,    128,    131,    133,    134,    136,   138,   140,   141,   143 

failure  to  report  bank  unsafe,  penalty  for 143 

may  disapprove  loan  to  director 88 

may  order  liquidation,  when 134 

must  call  for  reports   131 

must  examine  bank  before  issuing  certificate 127 

must  post  bulletin,  when  141 

must  report  to  governor 140 

ofllce  of 122 

papers  to  be  filed  with,  what 8 

report  of  banks  to 130 

to  take  possession  of  bank,  when 136 

Superintendent's  verified  report  prima  facie  evidence 142 

Surviving  husband,  wife  or  children  may  collect  deposit,  when....     16 

Survivor  receives  joint  deposit 16 

Title  of  act 1 

Trust  company,  certificate  from  superintendent 100 

confidential  information  of  103 

definition  of 6 

departments  of 106 

investments  of  105 

may  make  mortgrage  to  state 97 

may  receive  money  of  estate 93 

may  be  conducted  by  corporation,  how 3 

must  furnish  certificate  of  such  99 

must  make  additional  deposits  with  state 98 

must  make  deposits  with  state 96 

must  pay  interest  on  deposits 95 

not  required  to  give  court  bond 94 

powers  and  duties  of 90 

public  administrator  may  deposit  with 92 

reports  of 101 

retiring  from  business 102 

to  receive  interest  from  state  on  deposits 98 

Trust  funds,  court  may  order  deposit  of 91 

deposit  of 16 

not  to  mingle  and  not  reserve 32 

Trust,  the  use  of  word,  limited 104 

U nderwriting  bonds  limited 36 

Unsafe  or  unsound  bank,  possession  of 136 

Verified  reports  of  superintendent  evidence 142 

Violation  of  law  or  charter  by  bank 134 

Voluntary  liquidation 137 


m^ 


